Kuwait's economy shrinking for fourth year in a row

Kuwait's parliament on Wednesday passed the budget for the 2018-2019 fiscal year, projecting a huge deficit for the fourth year in a row amid a shrinking economy.

The shortfall for the accounting year, which began in Kuwait on April 1, is estimated at more than $21 billion (£16 billion) - about 17.5 percent of the OPEC member's gross domestic product.

Several MPs in the oil-rich Gulf state accused the government during debate of not doing enough to "stop the squandering" of public funds and failing to implement reforms.

The actual deficit may turn out to be lower than forecast if oil prices rise, with crude currently calculated at about $50 a barrel, $25 below market prices.

State budget revenues are projected at $49.5 billion, up 12 percent on last year's estimates, while spending is forecast to reach $71 billion, about 8.5 percent more than last year.

After posting healthy surpluses for 16 straight years, Kuwait has posted a budget deficit in each of the past three years after oil prices began to slide in mid-2014.

Oil income in Kuwait is estimated at $44.3 billion, based on a daily production of 2.8 million barrels.

Less than a fifth of expenditures are slated for development projects.

Finance Minister Nayef al-Hajraf said Kuwait's economic growth contracted by 2.9 percent last year due to low oil prices.

Like other Gulf states, which rely heavily on oil income, Kuwait has imposed revenue-boosting measures such as raising power and fuel prices.

The emirate has a sovereign wealth fund worth more than $600 billion.