Current economic conditions require spending cuts – 20% budget reduced
KUWAIT, June 4 (KUNA) – Kuwait Prime Minister His Highness Sheikh Sabah Khaled Al-Hamad Al-Sabah Thursday called on all authorities to understand “critical circumstances,” which required spending cuts to overcome the current economic conditions.
His Highness the Prime Minister said authorities should abide by all measures and show “serious cooperation in order to overcome this phase with the least damage possible.”
He made the remarks while chairing an online cabinet meeting to discuss measures to address the economic ramifications of the novel coronavirus, Covid-19, Deputy Premier, Minister of Interior and Minister of State for Cabinet Affairs Anas Al-Saleh said in a statement after the meeting.
Governor of the Central Bank Dr. Mohammad Al-Hashel, in a briefing about the stimulus package, said no projection could determine how deep the crisis would be nor the time needed for recovery.
He warned that delaying the rapid response to help companies and SMEs would have “big negative economic impacts,” which mean they would go bankrupt.
Al-Hashel, who chairs the higher steering committee to stimulate the economy, said the committee adopted rapid stimulus measures to support banks in order to improve their lending abilities.
The committee reduced discount rate, value of loans and offered up to KD 250,000 (USD 811,000) soft loans for every owner of a small or medium size enterprise, who should pay back the loan in four years.
The cabinet hoped the stimulus measures contribute to addressing economic impacts caused by Covid-19, and said the private sector should continue its major role to achieve Kuwait’s 2035 vision.
The cabinet also said the private sector should remain attractive to Kuwaiti cadres.
The cabinet also approved Finance Ministry’s proposals not to increase budgets of independent government authorities, institutions and funds for five years, as well as reducing their budgets by 20 percent for fiscal year 2020-21.
The ministry should also coordinate with all government departments to reconsider services and subsidies, and projected revenues out of this action.
On the other hand, Minister Al-Saleh briefed the cabinet about a meeting between His Highness the Prime Minister with editors in chief of local newspapers, during which he talked about the government measures to confront the spread of coronavirus.
His Highness the Prime Minister also reaffirmed determined to carry out comprehensive reforms and crackdown on corruption and the corrupt with the ultimate objective of preserving the public funds.
The cabinet, said Al-Saleh, voiced relief as the number of recoveries from the coronavirus exceeded 50 percent than the number of active cases.