Kuwait's budget deficit in the first five months of its fiscal year stood at KD1.094 billion ($3.62 billion) after a deduction for the Future Generations Fund, the finance ministry said on Tuesday.

The deficit from April 1 to August 31 stood at KD361.38 million before the 10 per cent contribution of KD733.50 million to the Future Generations Fund, part of Kuwait's sovereign wealth fund, a statement carried by Kuwait News Agency said.

Finance Minister Anas Al-Saleh told reporters on September 15 that Kuwait plans to issue bonds in local currency by the end of the year to help bridge its budget deficit.

Kuwait's parliament in July approved a state budget for the current 2015-16 fiscal year, which begins on April 1, that envisages a budget deficit of KD8.18 billion because of low oil prices.

However, the actual deficit may not turn out to be nearly as large. The size will depend on oil prices, while Kuwait has in the past often underspent its budget because of bureaucratic red tape and tensions between the cabinet and parliament that have slowed economic projects. This could also limit the deficit.  -Reuters