Oct. 1 (Bloomberg) -- Kuwait’s public spending is still too high, according to Central Bank Governor Mohammad Al-Hashel, after a series of strikes prompted the government to raise wages in the public sector.
“We think it’s very high, and we’re taking all the necessary actions to reduce the current expenditure and spend more on investments and capital expenditures,” Al-Hashel told reporters in Kuwait today.
Former central bank Governor Sheikh Salem AbdulAziz Al-Sabah resigned in February, criticizing the government’s increase of public spending “to unprecedented levels.” The International Monetary Fund said in May that Kuwait will exhaust all oil revenue by 2017 if the policy continues.
A series of public strikes late last year led to increases to wages, including a 25 percent raise in March. Current expenditure by OPEC’s third-biggest oil producer accounted for more than 60 percent of total public spending in the 2011-2012 fiscal year.
The nation’s economy may grow between 5 percent and 6 percent this year, Al-Hashel said, short of the IMF’s forecast of 6.6 percent.
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