The government has approved the draft budget for fiscal year 2025-2026, projecting a 6.3 billion dinars deficit (13% of GDP), up from 5.6 billion dinars in 2024-2025.
While current expenditures remain steady, the high total expenditures highlight the need for structural reforms to ensure long-term fiscal sustainability, according to Al-Jarida daily.
Oil revenues are forecasted to decline due to lower crude prices, offset by growth in non-oil revenues, which are expected to reach 2.9 billion dinars, driven by new measures including a 15% income tax on multinational companies.
The 2025-2026 budget sets expenditures at 24.5 billion dinars, a slight decrease of 0.1% from the previous budget, with a reduction in subsidies and capital spending.
Despite the decline in capital expenditures, the budget includes measures to enhance liquidity, increase non-oil revenues, and rationalize spending.
The government plans fiscal reforms, including a new public debt law with a debt ceiling of 30 billion dinars, allowing for up to 50-year bonds, and new laws to reprice government service fees.
These measures aim to boost financial liquidity, finance the deficit, and support future capital expenditures.
The budget is seen as a step toward deeper fiscal adjustments, with upcoming reforms expected to include restructuring government units, privatization laws, and the gradual elimination of energy and water subsidies, similar to models in Saudi Arabia and the UAE.
