KUWAIT CITY — Kuwait on Monday approved its budget for the 2018-2019 fiscal year, projecting a huge deficit for the fourth year in a row because of low oil prices.

Next year's deficit is estimated at $16.7 billion, or 13.5 percent of the OPEC member's gross domestic product.

Finance Minister Nayef Al-Hajraf told a press conference the government would withdraw from the state reserve fund and borrow on the domestic and international debt markets to finance the shortfall.

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

Al-Hajraf said the new budget projects revenues at $50 billion, up 12 percent on last year's estimates after the oil price rose from $45 to $50 a barrel.

Oil income is estimated at $44.3 billion on a daily production of 2.8 million barrels. Spending is projected at $66.7 billion, marginally higher than last year, the minister said.

He said government wages and subsidies account for 73 percent of the budget, which takes effect on April 1. It still has to be passed by parliament.

Just 18 percent of spending will go on development projects, Hajraf said. He said Kuwait will not impose value-added tax or other taxation without parliamentary approval.

Only Saudi Arabia and the United Arab Emirates have implemented a pan-Gulf decision to impose VAT from this year. But Al-Hajraf said the government may raise charges on public services to boost non-oil revenues.

Like other Gulf states, which rely heavily on oil income, Kuwait has imposed measures such as raising power and fuel prices to boost revenues. The emirate has a sovereign wealth fund worth more than $600 billion. — AFP