Kuwait Nears Subsidy Cuts

Kuwait is moving sideways in approaching subsidy cuts, rather than taking decisive action like its fellow GCC members.

Parliament’s Financial and Economic Affairs Committee is reviewing the government’s plan to cut subsidies for basic services and commodities, as well as reduce administrative expenses by 25% in the 2016-17 budget; but the plan won’t be presented to parliament until 1 April, the first day of the 2016-17 financial year.

Committee chairman Faisal al-Shaya says the government estimates that the state could save KD1.2bn ($4.0bn) by cutting electricity and water subsidies: 30% of household electricity consumption is wasted, he reckons. But he says that parliament has proposed introducing consumption quotas rather than price hikes as the means of reducing consumption.


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