Latest Kuwait News
$5bn Stimulus Package finally receives a go-ahead
The long-awaited $5bn Stimulus Package has been finally implemented in Kuwait yesterday, aiming to shore up the economy amidst the times of financial crisis.
The bill was put on hold for two months, as the MPs in the State of Kuwait debated over the details of its implementation, which resulted in a stand-off, which consequently led to the assembly being dissolved by late-March.
According to the by-laws that form a part of the decree issued by the out-going Cabinet last month, the legislation for the package is now effective.
The cash would be utilized to assist the troubled investment firms, few of which have already defaulted on debt, and to encourage banks in offering new credit.
As per the terms in the bill, the state will guarantee 50 percent of an estimated KD4bn of new credit facilities to be granted by banks to local companies during the next two years.
It also offers 15-year guarantees against any drop in the value of local banks’ investment and real estate portfolios and old loans to local companies.
The Sovereign Wealth Fund of the State, Kuwait Investment Authority, has also been granted permission to buy into new capital, if the shareholders are unable to fully subscribe to the required capital increases of the listed firms or banks.
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