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Panel approves budget surplus as oil price soars

By B Izzak

KUWAIT: The National Assembly’s budgets committee approved on Monday the 2022/2023 fiscal budget, projecting a surplus for the first time in many years on the back of a sharp rise in oil prices, head of the panel said. MP Adnan Abdulsamad said revenues are estimated at KD 23.4 billion, a jump of 114 percent over the last fiscal year’s estimates. Oil income is projected to make up 91 percent of all revenues, while non-oil income is projected at KD 2 billion, he said.

Spending is projected at KD 23.1 billion, leaving a surplus of slightly in excess of KD 300 million, the lawmaker said. Oil revenues were calculated on the basis of $80 a barrel, while actual prices today are $114 a barrel, Abdulsamad said. The conservative price is adopted in case of possible fluctuations in the price of oil, he said.

Kuwait has posted deficits in budgets since the 2015/2016 fiscal year after a crash in oil prices due to abundant supplies and a drop in demand, in addition to economic woes during the years of the coronavirus pandemic, during which demand slumped to unprecedented levels. During those years, accumulated deficits surpassed KD 50 billion, resulting in the government withdrawing funds from the state general reserves, which almost dried up.

Abdulsamad said wages at KD 12.8 billion and subsidies at KD 4.4 billion accounted for as high as 74.5 percent of total spending, a problem that Kuwait’s government finances have been facing for long. Capital spending, which represents expenditures on projects, is estimated at KD 2.9 billion or 12 percent of the budget, according to Abdulsamad.

The lawmaker said reports on the state budget and the budgets of 39 government agencies and departments have been approved and sent to the Assembly for approval. An emergency Assembly session is expected to be convened when the government and the Assembly agree, he said. HH the Amir Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah said in a speech last week that he has decided to dissolve the Assembly and call for snap polls. The decree, however, has not been issued yet and the process could take months.

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