General reserve ‘cuts’ not indicative of deficit

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KUWAIT CITY, July 16, (KUNA): Deductions worth KD 28.5 billion ($94 billion) in the general reserve from 2015 to 2017 do not represent the deficit for those three years, said Kuwait’s Finance Ministry on Sunday.

The majority of subtractions from the general reserve in the last three years aimed to close the budget deficit for the fiscal year 2016-2017, which stood at KD 5.737 billion ($18 billion), the ministry’s official spokesman Abdulmohsen Al-Tayar told the press.

Meanwhile, deductions from the general reserve for the fiscal year 2015-2016 were worth KD 5.071 billion ($16 billion), he added. Al-Tayar noted that total sums transferred to the Future Generations Fund (FGF) in the years 2015- 2017 stood at KD 15.548 billion ($51 billion), while Kuwait’s Public Institution for Social Security’s actuarial deficit in those years was KD 1.413 billion ($4 billion).

He pointed out that the nation’s laws only allow pecuniary “additions to the FGF” and the general reserve only deals with oil as well as domestic and foreign bond revenues. “A sum that is around 10 percent or higher than the average state revenue is added to the FGF, while other amounts are taken from the general reserve to cover government spending,” Al-Tayar revealed.

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