Kuwait has approved its state budget for 2024-2025, which forecasts a deficit of $19.1bn (KWD5.89bn), for the fiscal year that starts April 1, 2024, and ends March 31, 2025.
The projected deficit for the next fiscal year is 13.5 per cent lower than that forecast in the current year, according to the country’s finance ministry.
The draft budget is projecting revenue of KWD18.66bn down 4.1 per cent from the current year’s estimate while non-oil revenue is forecast to rise by 5.7 per cent to KWD2.42bn.
Kuwait forecasted a 6.6 per cent plunge in expenditure for the fiscal year 2024/25 to KWD24.6bn, and “salaries and subsidies will make up 79.4 per cent of the total expenditure”.
Furthermore, the Gulf state said it will allocate 9.3 per cent of the total expenditure towards capital expenditure while other expenses will make up 11.3 per cent.
The 2024/2025 budget is based on a daily production rate of 2.7 million barrels per day and Kuwait’s breakeven point is $90.7.
The Gulf state posted a surplus of KWD6.4bn in the 2022/23 fiscal year, ending nine straight years of budget deficits as a boom in oil revenue and more controlled spending delivered a boost for one of the Middle East’s biggest crude producers.
Last August, the International Monetary Fund said Kuwait’s economic recovery is ongoing but risks to the OPEC member’s outlook “remain substantial” and gridlock between the government and parliament continues to delay reforms.
The IMF said despite a plunge in the country’s oil GDP in 2023 due to oil production cuts, non-oil GDP growth would stay robust, driven by domestic demand, and is projected to remain steady over the medium term.