Kuwait's cabinet has approved the FY25/26 budget, which sees a wider deficit of KD6.3 billion ($20.39 billion).

 

Revenues are expected to ease by 3.6% budget-on-budget (b/b) to KD18.2 billion ($58.92 billion) due to expectations of reduced oil receipts (-5.7% b/b to KD15.3 billion) on a lower assumed oil price of $68/bbl (down from $70 in the previous budget) and slightly lower crude oil production of 2.50 mb/d  (from 2.55 mb/d). 

 

Non-oil revenues are projected to increase by 9% b/b to KD2.9 billion, helped by new revenue measures including the corporate income tax and higher traffic fees. 

 

Expenditures are estimated at KD24.5 billion, little changed from last year’s budget, with slightly higher outlays on employee compensation (+1.6% b/b) offset by minor declines in subsidies, other expenses and capital expenditures. Spending on the latter, estimated at KD2.24 billion (-2.2% b/b), while slated to fall for the fifth consecutive budget post-pandemic, may actually rise on the current year’s (FY24/25) outlay once the accounts are finalized given the historical tendency to underspend in relation to the budgeted amount and in view of the fact that the government plans to accelerate key development projects. 

 

The budget projects a wider fiscal deficit of KD6.3 billion (13% of GDP) from KD5.6 billion in the previous budget.