Kuwait public spending highest in the Gulf region based on GDP
KUWAIT CITY, May 31: According to a statistic prepared by the Central Bank of Kuwait, the country’s public spending is the highest in the Gulf region based on Gross Domestic Product (GDP), reports Al-Qabas daily.
The statistic was prepared in the form of a graph which was presented along with the government’s work agenda and then referred to the parliament. As per the statistic, “Kuwait’s spending rate is 56.4 percent of the GDP, which is very high compared to that of Oman (51.5 percent), Qatar (42.7 percent), Saudi Arabia (36.2 percent) and the United Arab Emirates (30 percent)”.
The statistic compared these figures with the international figures issued by the Eurostat — the statistical office of the European Union. It was discovered after comparison that Kuwait’s expenditure rate based on the GDP is higher than Europe’s average rate of 47 percent, the United States of America’s 32.5 percent, Japan’s 36.8 percent, Canada’s 40.8 percent and Britain’s 39.4 percent.
According to analysts, this rate of public spending refl ects the extent of governmental intervention in the national economy. It also indicates the ongoing spending and consumption inflation, which poses a burden on the national budget. The public spending in Kuwait reached more than KD 19 billion in the current fiscal year, with a large proportion being allocated for paying public employees’ salaries and other financial benefits.
However, the analysts and rating agencies affirm difficulty in control and rationalization “because there is a natural annual increase in the salary cap, as well as in the current spending of several ministries and authorities which are not adhering to the rationalization principle”. It is worth mentioning that Kuwait’s public spending rate based on the GDP increased after the sharp fall in the nominal GDP which was affected by the drop in oil prices.