Kuwait projects $10 billion budget deficit for 2022-2023

Kuwait’s cabinet on Monday submitted a draft 2022-2023 budget projecting a narrower budget deficit amid climbing oil prices. 

The Gulf state, whose revenues heavily rely on hydrocarbons, projected a budget deficit of $10.3 billion for the fiscal year starting in April, down 74.2 percent from the current year’s estimated shortfall, according to a finance ministry statement.

It added that spending would fall 4.8 percent to around $72.8 billion, of which 74.5 percent would be allocated to civil service wages and public subsidies.

Revenues are projected at $62.2 billion, up 72.2 percent from the current fiscal year’s estimates. 

“Next year’s budget projects higher revenue levels, however we were keen to maintain our cap on expenditure at 22 billion Kuwaiti dinars ($72.8 billion) while maintaining healthy capital expenditure that is in line with previous years,” said Kuwait’s finance minister Abdulwahab Al-Rushaid, according to the statement. 

A new Kuwaiti government was sworn in on December 29, the oil-rich Gulf emirate’s fourth in two years, after the last one resigned in November amid political deadlock. 

Kuwait has been shaken by disputes between elected lawmakers and successive governments dominated by the ruling Al-Sabah family for more than a decade, with parliaments and cabinets dissolved several times. 

The last government called it quits in November in the face of a standoff with parliament over reforms. 

The new lineup included a critical voice in Rushaid, who earlier in December called on the government to “focus on a sustainable economy rather than on the fluctuations of oil prices”. 

Like most Gulf countries, Kuwait’s economy and state budgets have been hit by the coronavirus pandemic and the low price of oil.