KUWAIT: Kuwait public finances have returned to the red after posting a budget deficit of KD 1.6 billion in the fiscal year 2023/2024 which ended on March 31, the finance ministry said on Wednesday. The shortfall was posted as a result of a 19.4 percent drop in oil income to KD 21.5 billion over the previous fiscal year’s KD 26.7 billion, which led total revenues to slide by 17.9 percent to KD 23.6 billion, the ministry said in a statement received by Kuwait Times. Non-oil income rose 1.3 percent but remained a non-factor at just KD 2.1 billion.

But the result is not a major disappointment, as Kuwait had projected a deficit of KD 6.8 billion in the budget at the start of the fiscal year. But the deficit comes a year after Kuwait posted its first surplus after eight consecutive years in the red. Finance Minister Anwar Al-Mudhaf said last week that the state paid a total of KD 33 billion for budget shortfalls in the past nine years. That reduced the assets of the State Reserve Fund to just KD 2 billion, the minister said.

Total spending in the 2023/2024 fiscal year hit KD 25.2 billion, compared to KD 22.4 billion in the previous year, a rise of 12.7 percent, the ministry said. Wages and subsidies accounted for KD 20.4 billion, as much as 81 percent of total spending, while capital expenditure came in at KD 1.86 billion, a meagre 8.0 percent of spending, the ministry said.

Average price of Kuwaiti crude throughout the year was at $84.36 a barrel, compared to $97 a barrel last year, and average oil production was at 2.65 million barrels per day, almost the same as the previous year. The ministry recalled that public revenues do not include revenues from the Future Generations Fund, the country’s sovereign wealth fund.

The fund’s current assets are estimated by the Sovereign Wealth Fund Institute at just below $1 trillion, a historical record high. The institute said on Tuesday that Kuwait’s sovereign wealth fund added $177 billion in the past year to hit $980 billion. Since March, the fund has added $56 billion. The figures have not been officially confirmed as the figures are kept confidential.