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Kuwait draft budget estimates $22.2bn deficit

July 10, 2023 at 6:45 pm

A general view taken on April 16, 2016 shows the Shuaiba oil refinery south of Kuwait City [YASSER AL-ZAYYAT/AFP via Getty Images]

Kuwait’s draft budget for 2023-2024 estimates a deficit of 6.8 billion dinars ($22.2 billion), hit by lower oil prices and volumes, a local paper reported, citing a Member of Parliament, Reuters reports.

The draft budget for the year from 1 April estimates oil revenue of 17 billion dinars, down 19.5 per cent from 2022-2023, according to the report by Al Dustor shared by Parliament’s Twitter account, citing MP Osama Al-Zaid.

The draft budget was based on an oil price of $70 a barrel, Al-Zaid told Al Dustor. Brent crude was trading at $78.44 at 1600 GMT on Monday.

Kuwait has had to comply with production cuts by the OPEC+ producer group comprising the Organisation of the Petroleum Exporting Countries (OPEC) and allies led by Russia, while making slow progress on diversifying revenue sources compared with its Gulf neighbours.

Feuding between successive appointed governments and elected parliaments in the OPEC member state has hampered fiscal reform for years, including a debt law that would allow Kuwait to tap international markets and address its heavy reliance on oil.

Non-oil revenue was expected at 2.2 billion dinars, up 10 per cent year on year, while expenditure was projected to rise by 11.7 per cent to 26.2 billion dinars, the report said.

Kuwait, last month, elected its third Parliament in two and a half years. Sheikh Ahmad Nawaf Al-Ahmad Al-Sabah was then reappointed as Prime Minister and formed a cabinet with a new Oil Minister, Saad Al Barrak.

Al Barrak last week said that Kuwait will invest more than $300 billion in the energy sector by 2040.

He also said it hopes to have a higher oil production quota when it ramps up capacity, adding that this was not urgent and that Kuwait is committed to OPEC decisions.

READ: Kuwait to invest $300bn in energy sector by 2040: oil minister says