Kuwait's government spending boost made the economy more vulnerable to a fall in oil prices due to the OPEC member's significant dependence on crude revenue, a senior central bank official was quoted as saying by a daily newspaper Sunday. "Kuwait's economy is the most vulnerable... among GCC countries," Mohammed Al-Kadi, a member of the central bank's board, told Arabic daily Al-Qabas in an interview. "They (other GCC states) are able to deal with any emergency crisis because spending in these countries on salaries, wages and subsidies did not reach the level of Kuwait's budget," he said. Kadi also said a jump in oil prices earlier this year was considered a "catastrophe" for the Gulf Arab state because it has encouraged a steep increase in government spending rather than adding up to the country's savings. US crude prices surged to a 2011 peak of $114 per barrel in May before dropping to around $80 per barrel earlier this month as the reduction of the top-tier US credit rating hammered markets. In June, Kuwait's parliament approved a budget of 19.4 billion dinars ($71 billion) for the 2011/12 fiscal year, the biggest since at least 2003 and a 19 percent jump from the previous year, basing it on an oil price of $60 per barrel. Oil revenue in Kuwait accounts for more than 90 percent of the Gulf state's budget. Kuwait's fiscal year starts in April.
