Kuwait’s budget deficit hit $18.44 billion in fiscal 2019-2020, which ended in March. The deficit will widen this fiscal year on the back of the oil price collapse and the pandemic, potentially reaching $45.78 billion (14 billion dinars). This is up from a previous deficit projection of $25.18 billion (7.7 billion dinars).

In January this year, when Kuwait was budgeting for fiscal 2020-2021, the size of the deficit stipulated in the budget was $3.33 billion, based on oil price projections of $55 a barrel of Brent. The budget gap was 19 percent higher than the deficit for the previous fiscal year as the country relies almost entirely on oil revenues for its income and had not been able to shake off the effects of the previous oil price crash before this one hit.

To avoid depleting the fund it uses to cover the current shortfall and keep paying salaries to its administration, Kuwait’s parliament is debating a new debt law that will untie the government’s hands to borrow up to $65.4 billion (20 billion dinars) over the next 30 years.

The General Reserve Fund shed as much as $13.04 billion (four billion dinars) in just a hundred days since the pandemic hit, according to Kuwait’s sovereign wealth fund, the Kuwait Investment Authority.

Kuwait is one of the six Gulf economies that are too dependent on oil revenues for their own comfort. In a recent forecast from analysts polled by Reuters, the Gulf economies were all expected to contract this year before they rebounded in 2021. Judging by the latest from Kuwait, not all would be able to rebound so soon.

This article was originally published on Oilprice.com