How did falling oil prices in the mid-2010s affect Kuwait’s government budget?

In the mid-2010s, Kuwait faced significant economic challenges due to a sharp decline in global oil prices that began in late 2014. Because the country’s economy is heavily dependent on petroleum extraction, this downturn resulted in government budget deficits.123

To address these fiscal shortfalls, the government implemented austerity measures, most notably by cutting subsidies for fuel, water, and electricity, which had previously been among the highest in the world. While these reforms were supported by organizations such as the International Monetary Fund and the World Bank, they led to a rise in consumer prices and increased public dissatisfaction. This discontent strengthened the political opposition, which subsequently blocked or weakened further austerity plans, such as the implementation of a value-added tax.12