KUWAIT- Kuwait expects its budget deficit to widen in its 2020/21 fiscal year to 14 billion dinars ($46 billion), according to a ministry of finance estimate in a parliamentary document, as the economy reels from the coronavirus outbreak and weak oil prices.
The projection compares with a previous forecast of 7.7 billion dinars, according to the document, seen by Reuters. Kuwait's fiscal year runs from April 1 to March 31.
Kuwait is debating this week a debt law in the parliament that would allow the country to borrow as much as 20 billion dinars over 30 years.
The oil-rich Gulf state is scrambling to boost state coffers badly hit by the coronavirus crisis and low crude prices, and has been rapidly depleting its General Reserve Fund to plug a budget deficit. urn:newsml:reuters.com:*:nL8N2FI0GH
The Ministry of Finance, Kuwait Investment Authority (KIA) and the central bank were not immediately available to comment.
A total of 8 billion dinars from the debt amount will be used to cover the deficit, while the remaining amount will be used for capital projects.
The debt raised will be paid back through a surplus in the budget or will be refinanced, the document showed.
The document also carried comments from Kuwait's central bank, which said the slow pace of economic reforms may complicate Kuwait's ability to raise financing.
In the same document, sovereign wealth fund KIA said liquidity in the General Reserve Fund decreased from 5 billion dinars in the beginning of fiscal year 2020/2021 and bled 4 billion dinars in less than 100 days.
The depletion meant that the government may not be able to pay all the August-September salaries and other expenses, the KIA said.
(Writing by Saeed Azhar; Editing by Steve Orlofsky) ((Saeed.Azhar@thomsonreuters.com; +971 44536787; Reuters Messaging: firstname.lastname@example.org))