Kuwait's Emir Sheikh Sabah al-Ahmad al-Sabah opened the new parliament on Sunday by declaring that a reduction in public spending is "inevitable" in the face of weak oil prices.
The emir said the sharp drop in oil revenues has resulted in a huge budget deficit and "there is no other option but to take effective measures to deal with it."
"I am confident that parliament and my brother citizens are all aware that reducing public expenditure is inevitable through well-studied measures," he said.
He however said that those measures should spare low income people and take into consideration social justice.
Opec member Kuwait, which sits on around 7% of the world's proven crude reserves, has sought to cut spending and boost non-oil revenues in a bid to diversify its economy.
But the measures, which included raising electricity and fuel prices, triggered a political crisis that led the ruler to dissolve the previous parliament in October and call for snap polls.
In the November 26 polls, the opposition which vowed to reject austerity measures won nearly half of the 50 seats.
Most of the other candidates also opposed the measures.
Before crude prices began to slide in mid-2014, Kuwait generated about 95% of its income from oil.
But the country's oil revenues dropped from a massive $97bn in the 2013-2014 fiscal year to just $40bn in the last financial year, which ended on March 31, according to finance ministry figures.
And oil income is projected to slide further to around $35bn this fiscal year.
In 2015-2016, the Opec state posted its first budget deficit, of $15bn, in 16 years. It is projecting a shortfall of $29bn this year.
During its run of surpluses, Kuwait amassed reserves worth $600bn invested mostly abroad.
Kuwait has been providing a generous welfare system to its nationals, who make up 30% of its population of 4.4mn.
"I would not have liked to ask you any day to drop anything of the welfare (you have been getting)," the emir said in his speech.
To plug a growing budget shortfall, the Gulf state has started borrowing for the first time in two decades.
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