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Press Dossier    By Date   01/02/2023 Kuwait projects KD 5bn deficit

Kuwait Times, Wednesday, Feb 01, 2023 | Rajab 10, 1444

Kuwait projects KD 5bn deficit

Kuwait: The finance ministry on Tuesday released the draft state budget for the 2023/2024 fiscal year, projecting a huge deficit of KD 5 billion due to a sharp drop in oil revenues and a rise in expenditures, the ministry said in a statement. The draft budget was approved by the Cabinet before resigning last week and it will become official only after its approval by the National Assembly.

Revenues in the fiscal year, which starts on April 1, were projected at KD 19.6 billion, down a massive 16.9 percent compared to this fiscal year’s estimated income of KD 23.4 billion, the statement said. Oil income in the year was projected to slide a hefty 19.5 percent to KD 17.2 billion from KD 21.3 billion estimated for the current fiscal year, it said.

Expenditures on the other hand were projected to soar by 11.7 percent to KD 26.3 billion from this year’s estimates of KD 23.5 billion, according to the ministry. This will leave a projected deficit of KD 6.8 billion, way above the estimated deficit of just KD 124 million, according to the ministry’s statistics. The main reasons for the sharp rise in the budget deficit were a major rise in wages and subsidies to the tune of over KD 3.2 billion, the ministry said.

Wages and salaries are projected at KD 14.9 billion compared to KD 13.2 billion estimated for the current year, while subsidies are projected at KD 5.9 billion from KD 4.4 billion in the current year, the ministry said. The ministry said the drop in oil income is attributed to calculating the price of oil at $70 a barrel in the next fiscal year from $80 a barrel this year.

The ministry described next year’s budget as “exceptional” because of extraordinary non-recurring expenditures like paying arrears of KD 1.1 billion to the ministries of electricity and water and oil. The ministry also allocated KD 481 million for government employees willing to take their annual leave in cash and close to KD 600 million for an estimated 21,000 new jobs in the government.

The ministry however referred to a positive development in the next budget, which is a 10 percent rise in non-oil revenues to KD 2.9 billion from an estimated KD 2.1 billion in the current year. The ministry said that if profits of government agencies and departments are added to the budget, the deficit will be lower at KD 5 billion.

But MP Abdulwahab Al-Issa sent a series of urgent questions to the ministers of finance and oil over the new budget. He inquired how current expenditure items of wages and subsidies jumped over KD 3 billion in one year and how the cost of oil production increased by 22 percent over the previous year. He demanded clarification for both items. He also asked if these increases are temporary or permanent.

Meanwhile, the Central Statistical Bureau said on Tuesday Kuwaiti families earn four times more than that of expat families, and they spend far more, according to the results of a field survey for 2021 spending. The survey showed that the average monthly income of Kuwaiti families is KD 3,995 compared to just KD 940 for expat families. It said Kuwaiti families spend KD 4,139 monthly, while expats spend KD 1,071.

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