Kuwait’s budget deficit hits record $35.5 billion

RIYADH: Kuwait recorded a deficit of 10.8 billion dinars ($35.5 billion) in the 2020-2021 fiscal year, a surge of 174.8 per cent, which is the highest budget deficit in the country’s history, according to a report by the Kuwaiti Finance Ministry.

Revenues amounted to 10.5 billion dinars in the fiscal year ended in March 31, a decrease of 39 per cent from the previous year, while spending amounted to 21.3 billion dinars, an increase of 0.7 per cent.

In June, the Kuwaiti parliament approved the 2021/22 budget proposed by the government in January, which forecasted spending of 23.05 billion dinars and a deficit of 12 billion dinars.

The Ministry said that oil revenues fell 42.8 per cent in 2020/21 to 8.8 billion dinars, while other revenues fell 6.5 per cent to 1.7 billion dinars.

“The deficit is due to the sharp drop in oil prices and the curtailment of government activities to a minimum as a result of the Covid-19 pandemic,” Finance Minister Khalifa Hamadeh said.

“The government is fully prepared to move forward with implementing more realistic solutions to develop public finances,” he added.

Hamadeh said that increased oil revenues due to higher oil prices did not cover the state’s budget obligations and that Kuwait would need oil prices at $90 a barrel to adjust the budget.