"Sheikh Salem Abdul-Aziz Al-Sabah spoke about the economic situation in Kuwait and about the imbalances it witnesses which could lead to a lot of risks at various levels," state news agency KUNA quoted the central bank governor as saying late on Sunday. Sheikh Salem was speaking at a cabinet meeting, it said.
Sheikh Salem said that such concerns should be addressed by corrections to avoid any negative implications that they might have on the future of Kuwait, KUNA added.
The report did not give further details but the comments rattled Kuwait's benchmark, which closed down 1.6 percent on Monday, hitting a new seven-year low.
"There are many issues affecting the Kuwait market. One is the CMA laws that create conflict through their application, mainly on funds and the new regulations," said Safaa Zbib, head of research at Kuwait and Middle East Financial Investment Co.
Kuwait's Capital Markets Authority (CMA) has sought to better regulate the country's stock market and investment firms.
"The government seems very pessimistic about the economy. And a lack of lending is crippling the banking sector. When companies are not in a good shape to borrow, economic activity stops," Zbib added.
Last month, Kuwait's Parliament approved a 19.4 billion-dinar ($71 billion) state budget for the 2011/12 fiscal year, the biggest since at least 2003.
The budget, based on a crude price of $60 a barrel, faced opposition by several lawmakers including members of the parliament's budget committee who dubbed the increased spending "crazy".
Oil revenues in Kuwait, the world's fourth-largest oil exporter, account for more than 90 percent of state revenues.
A fall in oil prices is one of the risks facing the country's economy in 2012, Kuwait's Finance Ministry has said in a report on its website.
"Of course, Kuwait is one of those countries that has benefited hugely from higher oil prices. My view is that although there has been a fiscal expansion ... the imbalances that (the governor) referred to might be over a longer period," said Gabriel Sterne, a senior economist at Exotix in London.
Analysts polled by Reuters in June expect the country's economy to expand by 4.4 percent this year.
In January, the government announced plans to spend nearly $5 billion, or around 4 percent of its GDP, on cash grants and free food rations.
