ShareKUWAIT: Kuwait recorded its first surplus in nine years for the 2022-2023 fiscal year which ended in March, the finance ministry said on Wednesday, crediting last year’s surge in oil prices. The state, whose revenues rely heavily on hydrocarbons, closed its fiscal balance with a surplus of KD 6.4 billion ($21 billion), the ministry said, against an actual deficit of KD 4.3 billion ($14 billion) in the previous fiscal year. “The final account of the state’s financial administration records an actual surplus for the first time in nine years,” the ministry said in a statement on its website.
More than 92 percent of revenues came from oil after prices surged following last year’s Russian invasion of Ukraine. Oil revenues for the fiscal year which started in April 2022 stood at KD 26.7 billion ($87 billion), a 64 percent increase from the previous year, the ministry said. The average price of a barrel of oil over the fiscal year stood at $97.1, an increase of 21.4 percent compared to the previous year. Output was 2.7 million barrels per day. Revenues for the current fiscal year are expected to fall due to a decline in oil prices.
The draft budget for the 2023-2024 fiscal year — published in January — was calculated based on a price of $70 per barrel. The 2023-2024 draft budget projects a growing deficit, with total revenues expected to drop to around $63.8 billion. The finance ministry said actual revenues reached KD 28.8 billion ($93.8 billion), rising by 54.7 percent, in the fiscal year 2022-2023, noting that oil proceeds stood at 92.7 percent of the achieved income. Actual oil revenues amounted to KD 26.7 billion ($87 billion), rising by 64.7 percent, while actual non-oil proceeds reached KD 2.1 billion ($6.8 billion), falling by 12.8 percent.
Total actual expenditures reached KD 22.4 billion ($73 billion), a fall of 2.6 percent, the statement said. Wages and subsidies constituted 78 percent of total expenditures and actual capital spending reached nine percent of total expenditures. The press release quoted Deputy Prime Minister, Minister of Oil and Minister of State for Economic Affairs and Investments and the Acting Minister of Finance Dr Saad Al-Barrak as saying Kuwait enjoys a solid financial status, huge reserves and monetary and financial stability.
These factors solidify the state vis a vis oil market jitters in the short term “and enable us to rise above the interim challenges and seize opportunities emanating from these challenges”. Kuwait is home to seven percent of the world’s crude reserves. It has little debt and one of the strongest sovereign wealth funds in the world. However, it suffers from constant standoffs between elected lawmakers and governments. The political instability, which has seen seven general elections held in little more than a decade, has spooked investors and stymied economic reforms. Kuwait’s fifth government in less than a year took the oath of office last month after the latest election returned an opposition-controlled parliament. – Agencies
