Kuwait budget deficit expected to decrease 13.5% in 2024-25

Kuwait’s budget deficit is expected to decrease by 13.5 percent in the 2024-25 fiscal year, according to a draft budget released by the Ministry of Finance.

The shortfall is forecasted to hit 5.89 billion dinars ($19.15 billion), with total revenues estimated to amount to 18.6 billion dinars, a 4.1 percent decline from the previous fiscal year.

The draft budget for the year sees oil revenues at 16.23 billion dinars, down 5.4 percent from 2023-2024, based on an oil price of $70 a barrel.

Expenditure is projected to fall by 6.6 percent to 24.55 billion dinars.

Salaries and subsidies are estimated to make up 79.4 percent of the total expenditure, while capital expenditure is expected to comprise 9.3 percent of total expenses.

The 2024-25 revenue projections are based on the assumption that Kuwait will produce 2.7 million barrels per day, with an average crude price of $70 per barrel.

Meanwhile, non-oil revenues are expected to reach 2.4 billion dinars, a 5.7 percent increase from the previous year.

The budget will be reviewed by the National Assembly, before being passed into law and referred to the Cabinet and Kuwait Emir Sheikh Mishal Al-Ahmad Al-Jaber Al-Sabah for final approval.

Strong oil revenues helped Kuwait record its first budget surplus in nine years in 2022-23, with the country posting an excess of 6.4 billion dinars at the end of its financial year on March 31.

Oil revenues, which made up nearly 93 percent of the government’s income during 2022-23 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.

However, Kuwaiti Finance Minister Fahd Al-Jarallah said last November that while Kuwait’s economy is strong, the Finance Ministry is facing a liquidity crisis that it aims to stifle through exploring non-oil revenues.

He added in a statement published on the Kuwaiti government’s account on X that the Ministry of Finance is working on finding solutions to enhance liquidity and restructure the general reserve.