Reuters reported that Kuwait is expected to unveil new measures to shore up confidence in the economy, which may include a plan to help investment firms hit by the global crisis repay their debt.

The Kuwaiti government is facing increasing calls to support troubled investment firms, which make up more than half the Gulf state's listed companies and have borrowed heavily from banks as they expanded rapidly during an oil boom in the past few years.

A government source said that a central bank led economic task group was set to present a plan on how to support troubled firms to parliament for approval in the coming few days. The source said that "They are a range of measures to protect various sectors of the economy and help them deal with the impact of the financial crisis."

He declined to give details of the package but said the plan, designed to boost the whole economy, could also include a proposal to set up a state fund to buy assets from investment firms.

Kuwait's largest investment bank, Global Investment House, shocked the market earlier this month after saying that it had defaulted on most of its debt, while major Islamic firm Investment Dar has said it needed loans of up to USD 1 billion to refinance debt.

Another local investment official said the government would have to do something but did not expect an all out rescue plan for investment firms like the one for the Gulf Arab country's fourth-largest lender.

Kuwait last year stepped in to rescue Gulf Bank, after it was hit by derivatives losses. It also guaranteed bank deposits in a bid to boost confidence and allowed its sovereign wealth fund the Kuwait Investment Authority to pump cash into the bourse. The state has set up a market maker fund to try to shore up confidence and liquidity in the bourse that has plummeted in recent months as the global crisis hit the Gulf.

(Sourced from Reuters)