Kuwait to register highest deficit to GDP ratio in Gulf

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KUWAIT CITY, May 26: Standard & Poor’s (S&P) credit rating agency is expecting Kuwait to record the highest deficit to GDP ratio among Gulf countries in the current year by 20 percent, followed by Bahrain and the United Arab Emirates with 6 percent, Saudi Arabia with 5 percent, Oman with 4 percent, and Qatar with one percent, reports Al-Seyassah daily. The agency estimated that the cumulative deficit of Gulf governments would reach about $355 billion during the period between 2021 and 2024. According to the report issued by the agency, Saudi Arabia acquired about 60 percent of this deficit (equivalent to $213 billion), and then Kuwait by 25 percent (equivalent to $88.7 billion), the UAE by seven percent (equivalent to $24.8 billion), and Oman by four percent (equivalent to $14.2 billion).

Kuwait, Abu Dhabi and Qatar may rely more on liquidating part of their assets to meet the deficit. It is likely that Kuwait will issue a public debt law in 2021, but the size of the fiscal deficit that the agency expects until 2024 implies that it is likely to be exhausted, and the borrowing will be licensed under the law, which was previously proposed to have a limit of KD 20 billion, within three years. Sustainable solutions that last for a longer period could include a comprehensive program of reforms and measures to control public finances such as by reducing subsidies, filling the gaps in expenditures, and imposing new taxes, like many other Gulf countries

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