Finance Ministry submits 9.8 billion dinar deficit budget as spending rises and oil revenues weaken
Capital spending is set at 3.1 billion dinars, representing 11.8 percent of overall outlays, while the remaining 3.2 billion dinars, or 12.2 percent, are allocated to other expenses.
The Ministry of Finance has submitted the draft general budget for the 2026/2027 fiscal year to the Council of Ministers, projecting a deficit of 9.8 billion dinars amid rising expenditures and conservative oil revenue estimates.
The new fiscal year will run from April 1, 2026 to March 31, 2027. Total expenditures are estimated at 26.1 billion dinars, while expected revenues stand at 16.3 billion dinars. The projected shortfall represents a 54.7 percent increase compared with the current budget, which ends on March 31, 2026, reports Al-Rai daily.
Spending remains heavily weighted toward wages and subsidies, which account for 19.8 billion dinars, or 76 percent of total expenditures. Capital spending is set at 3.1 billion dinars, representing 11.8 percent of overall outlays, while the remaining 3.2 billion dinars, or 12.2 percent, are allocated to other expenses.
The ministry attributed changes in expenditure levels to several key factors, including a 741.2 million dinar increase in the public treasury’s contribution to social security, covering deficits in insurance funds.
Capital expenditures rose by 826.2 million dinars, with 318 million dinars directed to major projects at the Ministry of Public Works, including Mubarak Al-Kabeer Port, the Umm Al-Hayman station expansion, implementation of the North Kabd station, and the expansion of Kuwait International Airport’s Terminal 2. Additional allocations were made to the Ministry of Health to complete the Kuwait Cancer Center and to the Ministries of Defense and Interior for the purchase of military machinery and equipment.
At the same time, fuel subsidies for operating stations and refined products declined by 449.2 million dinars, reflecting lower global oil prices.
On the revenue side, oil income is estimated at 12.8 billion dinars, marking a 10.5 percent drop from the current budget. Non-oil revenues are projected at 3.5 billion dinars, an increase of 19.6 percent.
The oil price assumption used in the budget is an average of 57 dollars per barrel, while the estimated break-even price stands at 90.5 dollars per barrel.
The draft budget also provides for the creation of 14,518 jobs.
Finance Minister Dr. Yaqoub Al-Rifai expressed appreciation to ministry staff for their efforts in preparing the state’s general budget, describing the projections as based on cautious assumptions in light of oil market conditions.
