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Kuwait leads in public spending in GCC
June 3, 2017, 7:00 pm

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).

Kuwait’s public spending rate of 56.4 percent of the GDP was higher than that of Oman (51.5%), Qatar (42.7%), Saudi Arabia (36.2%) and the United Arab Emirates (30%).

Also, in comparison to international figures issued by the Eurostat — the statistical office of the European Union — Kuwait’s expenditure rate based on the GDP was 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 high rate of public spending reflects 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 KD19 billion in the current fiscal year, with a large proportion being allocated to 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.

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