KUWAIT: Al-Qabas reported quoting the government sources that withdrawals from the future generations fund to cover the budget deficit through transfers of ownership or exchanging assets is approaching KD 5.4 billion, bearing in mind that the total deficit in the general budget reached KD 7.5 billion during the first nine months of the current fiscal year – a monthly rate of KD 600 million – as per finance ministry data.
Based on what was transferred to the general reserve fund, the required liquidity needed to cover salaries and subsidies amounting to around KD 1 billion per month is secured until the end of March. The government began the process of exchanging assets between the general reserve fund and the future generations fund from June 2020 to provide the necessary liquidity to pay government employees’ salaries and finance current spending.
Sources said the investment authority has built up enough balance of cash in the future generations fund’s reserves as part of its precautionary policy to arrange for liquidity if the general budget enters a deficit. This is expected to last for years if oil prices do not go up.