KUWAIT: The government has sent the draft budget for the 2024/2025 fiscal year, in which it projects a KD 5.9 billion deficit, to the National Assembly for debate and approval, the finance ministry said. The projected shortfall is 13.5 percent lower than the deficit estimated for the current fiscal year 2023/2024 of KD 6.8 billion, according to figures made available by the finance ministry.

The draft budget also projects lower revenues and spending compared to the current fiscal year, which ends on March 31. Projected figures normally change at the end of the fiscal year based on the performance of oil prices, which contribute more than 90 percent to Kuwait’s revenues. In the last fiscal year 2022/2023, Kuwait projected a huge deficit but ended the year with a huge surplus of KD 6.5 billion because oil prices were much higher than estimated in the budget.

The finance ministry said it projected oil prices in the next fiscal year at $70 a barrel, lower than the current oil prices. Revenues in the budget are projected at KD 18.7 billion, 4.1 percent lower than revenues estimated in 2023/2024, mainly due to a drop in oil income from KD 17.2 billion to KD 16.2 billion. On the contrary, non-oil revenues rose by 5.7 percent to KD 2.4 billion from KD 2.3 billion, according to the finance ministry statistics.

Spending is projected at KD 24.6 billion, a reduction of 6.6 percent from the previous year’s KD.26.3 billion, which was Kuwait’s largest spending. The finance ministry said that wages and subsidies are projected to account for 79.4 percent of total spending. Wages and related spending are estimated at KD 14.8 billion and subsidies at KD 4.7 billion.

Capital spending is estimated at KD 2.8 billion. The draft budget will be reviewed and studied by the National Assembly’s budgets committee. The Assembly will ten debate and pass it before it closes the term in the summer.