The National Bank of Kuwait has said that it expects Kuwait to report a budget deficit of KWD3.9 billion, representing 9.8 per cent of gross domestic product (GDP), by the end of the current fiscal year 2015-2016.
The bank said in a special economic report that the general budget recorded a preliminary fiscal deficit of KWD1.9bn in the period that preceded the transfer of payments to the Reserve Fund for Future Generations.
“We estimate the 2015/2016 fiscal year to close with a deficit of KWD3.9bn or 9.8 per cent of GDP”, the bank says in the report published by the Kuwait News Agency (KUNA).
Despite the drop in public spending, wages and salaries as well as capital spending have increased, reflecting a pick-up in project delivery. The report adds that non-oil revenues remained below their average in the past five years.
By November last year, government spending stood at KWD6.6bn fiscal year-to-date; down by 22 per cent compared with the same period of the past year.
Actual spending was even higher at KWD11.2bn, according to new data published by the Ministry of Finance on actual withdrawals made from the government accounts at the Central Bank of Kuwait.
(KWD1 = AED12.1, at the time of publishing)