Kuwait reported a budget surplus for the last fiscal year, buoyed by higher oil prices after Russia’s invasion of Ukraine, easing the immediate pressure on the high-spending national finances of the country.
But the relief brought by the news in August was short-lived.
In the same month, the National Assembly ratified new plans for 2023/2024, setting the course for more high spending that the country can ill afford, in what was the biggest budget in the country’s history once again.
The stage was set for both sets of figures by the decision by OPEC+, the club of oil-exporting nations, to limit production. Support for higher crude prices meant headroom in 2022/23 between total government revenue of $94bn (28.8bn in Kuwaiti dinars) with oil revenue of $87bn. Spending reached $73bn, creating a $21bn surplus.
Then came the plans for 2023/2024. Spending was planned at $85.4bn (26.3bn dinars) with revenue projections at $63.4bn, with oil generating $17.2bn of it based on production estimates of 2.6 million barrels a day at an average price of $70 per barrel.
Non-oil revenue of $2.2bn meant a return to a budget deficit of $7.2 bn.