Kuwait is considering issuing bonds among various options to finance a budget deficit created by low oil prices, Finance Minister Anas al-Saleh said on Thursday. "Going to the market and issuing bonds and so on, could it happen this year? Possibly yes," he said in an interview with Al Arabiya television. "A specialised team at the central bank are studying this issue and the decisive factor will be what's best for the country, in addition to the economic benefit to the markets."
Saleh did not specify if Kuwait was considering international or domestic bonds. The government does not have outstanding dollar bonds and has only a modest amount of domestic debt. Figures showing a budget deficit of 2.31 billion dinars ($7.6 billion) in the last fiscal year to March 31, the first deficit since 1999/2000, came as a surprise, Saleh said. The preliminary figures were released on Wednesday.
Parliament approved on Wednesday a budget for the current year that envisages a deficit of 8.18 billion dinars. In addition to issuing bonds, Kuwait could run down assets in its sovereign wealth fund to cover its deficit, as Saudi Arabia has been doing. The Kuwaiti fund holds $548 billion of assets, estimates the Sovereign Wealth Fund Institute, which tracks the industry.
Source: Arabian Business