Oil dependence worries Kuwait

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 yesterday. "Kuwait's economy is the most vulnerable... among GCC countries," Mohammad 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. Al Kadi also said a jump in oil prices earlier this year was considered a "catastrophe" for Kuwait because it has encouraged a steep increase in government spending rather than adding up to the country's savings.