KUWAIT CITY — Kuwait is preparing for spending cuts as it seeks to counter the impact of the coronavirus pandemic on its economy. Underlining the need for austerity measures in order to overcome the current economic conditions facing the country, Kuwait's Prime Minister Sabah Khaled Al-Hamad Al-Sabah on Thursday called on all authorities to cooperate with the government's move and face this difficult phase with the least damage possible, state news agency KUNA reported. The Kuwaiti premier made the remarks while chairing a virtual Cabinet meeting to discuss measures to address the effects of coronavirus. Meanwhile, Kuwait's Governor of the Central Bank Dr. Mohammad Al-Hashel, in a briefing about the stimulus package, said no projection could determine how deep the crisis would be and how much time it would take to recover. He warned that delaying the rapid response to help companies and Small and medium-sized enterprises would have "big negative economic impacts" as they would go bankrupt. Al-Hashel, who chairs the higher steering committee tasked with reinvigorating the economy, said the committee adopted rapid stimulus measures to support banks in order to improve their lending abilities. The committee reduced discount rate, value of loans and offered up to KD 250,000 ($811,000) soft loans for every owner of a small or medium size enterprise, who should pay back the loan in four years. The Cabinet hoped the stimulus measures contribute to addressing economic impacts caused by COVID-19, and said the private sector should continue its major role to achieve Kuwait's 2035 vision. The Cabinet also said the private sector should remain attractive to Kuwaiti cadres. The Cabinet also approved Finance Ministry's proposals not to increase budgets of independent government authorities, institutions and funds for five years, as well as reducing their budgets by 20 percent for fiscal year 2020-21. The ministry should also coordinate with all government departments to reconsider services and subsidies, and projected revenues out of this action.
