Kuwaiti loses half its petroleum income in the current year

It is expected the Kuwait may lose half of its petroleum income in the current year because of falling prices, yet it will not borrow from the outside to cover the budget shortage.

Kuwaiti economist Jasem El-Saedoum said the income from petroleum exports will not exceed 1.9 billion dinars ($6.27 billion) in the financial year 1998/1999, which started on the beginning of July, in comparison to 3.9 billion dinars ($12.8 billion) in the previous financial year.

He expected that the average price of Kuwaiti raw petroleum will be less than $10 per barrel in the current year, down from more than $18 per barrel in 1997.

El-Saedoum said, "Actually this will be no big deal for Kuwait, because we are talking about one year." However, he added that if petroleum prices remain low for many years, the government will face problems because this will lead to aggravating the budget shortage and a reduction in foreign investment.