For the first time since 1999, oil-rich Kuwait has announced a budget deficit of KWD2.7bn in the 2014/2015 fiscal year mainly because of the plunge in oil prices, which plummeted by about 50 per cent since last year.
The country expects a larger deficit for the current 2015/2016 fiscal year as oil prices continue to hold their low level, says Kuwaiti deputy prime minister and finance minister, Anas al-Saleh.
The 2014/2015 deficit comprises 5.6 per cent of the gross domestic product, which, according to the minister, is a relatively high ratio that is set to swell further.
According the minister’s remarks carried by the Kuwait News Agency (KUNA), the country’s total revenues in the 2014/2015 fiscal year shrank by a major 21.6 per cent to KWD24.9 billion compared with KWD31.811bn in the previous year.
Oil returns slumped by 23.2 per cent in the outgoing fiscal year to stand at KWD22.5bn from KWD29.2bn in the previous year, the minister adds.
Kuwait’s economy depends heavily on oil revenues which make up 90.3 per cent of the total national income.
However, the minister assures that spending maintained an upward trend in the 2014/2015 fiscal year, with public expenditure amounting to KWD21.4bn compared with KWD18.903bn in the last fiscal year, up by 13.3 per cent.
(KWD1 = AED12.13, at the time of publishing)