Kuwait records budget surplus for first time in 9 years

Strong oil revenues helped Kuwait record its first budget surplus in nine years in 2022-2023, the Ministry of Finance has announced.

The country posted an excess of 6.4 billion Kuwaiti dinars ($20.86 billion) at end of its financial year on March 31, the latest figures show.

Kuwait saw a 54.7 percent surge in revenue compared to the previous year, pulling in 28.8 billion dinars over the course of 12 months.

Oil revenues, which made up nearly 93 percent of the government’s income during the year at 26.71 billion dinars, rose 64.7 percent from a year earlier. The average oil price for the fiscal year was $97.1 a barrel.

Total expenditure was 22.37 billion dinars, 2.6 percent lower than a year earlier, the ministry said.

“Kuwait enjoys a strong financial position, significant reserves, and monetary and financial stability, all of which shield us from the short-term effects of oil market fluctuations,” said Minister of Oil Saad Hamad Nasser Al-Barrak, speaking to Lebanese Broadcasting Corp. International.

The minister’s comments came just weeks after he pledged investment of more than $300 billion in the country’s energy sector by 2040.

For the fiscal year ending March 31, the emirate’s daily production rate touched 2.693 million barrels, accounting for approximately 7 percent of global reserves, showed the ministry’s data.

Since the collapse of oil prices in 2014, its budget has constantly registered deficits. However, Kuwait saw an upturn with the increase in oil prices that followed the Ukraine war.

The country’s draft budget for the next fiscal year estimated a deficit of 6.8 billion dinars hit by lower oil prices and volumes, a local paper reported earlier this month, citing a member of parliament.

The draft budget for the year beginning April 1 estimated oil revenue of 17 billion dinars, down 19.5 percent from 2022-2023, according to an Al-Dustor report shared by parliament’s Twitter account, citing MP Osama Al-Zaid.

The draft budget was based on an oil price of $70 a barrel, Al-Zaid told Al-Dustor.

Kuwait has complied with production cuts by the Organization of the Petroleum Exporting Countries and allies led by Russia while making slow progress in diversifying revenue sources compared with its Gulf neighbors.

Feuding between successive appointed governments and elected parliaments in the OPEC member state has hampered fiscal reform for years, including a debt law that would allow Kuwait to tap international markets and address its heavy reliance on oil, according to Reuters.