Kuwait government salary spending rises 29.2% in seven years
Statistics based on official figures revealed that government spending on salaries in the general budget has increased by approximately 3 billion dinars over the past seven years, reflecting a growth rate of 29.2 percent.
As a result, total spending on salaries in the draft budget for the new fiscal year 2025-2026 has exceeded 15 billion dinars. This marks a significant rise compared to the cost of salaries in the general budget seven years ago, specifically in the fiscal year 2019-2020, when the expenditure stood at 11.9 billion dinars.
According to the latest announced data, the number of employees in the public sector has reached approximately 483.2 thousand, with citizens constituting around 77 percent, totaling 372.8 thousand. Meanwhile, the number of expatriate employees in the government sector stands at about 110.4 thousand.
The government sector remains the most attractive employment option for citizens due to the numerous benefits it offers, which the private sector struggles to compete with. This presents a significant challenge for decision-makers in shifting citizens’ preferences toward private sector employment.
New Budget
The draft budget estimates for the new fiscal year 2025-2026 show a 1.6 percent increase in the salaries and related expenses item, bringing total estimated expenditures to approximately 15.05 billion dinars, compared to 14.8 billion dinars in the current year’s budget.
Despite a 9 percent growth in non-oil expenditures to nearly 3 billion dinars, the budget is expected to record a financial deficit of about 6.3 billion dinars in the coming year. This large deficit is attributed to declining oil revenues and the requirement for oil prices to exceed $90.5 per barrel to balance the budget. Additionally, capital expenditures account for 9.1 percent of total expenditures, with an allocation of 2.24 billion dinars in the new budget, reflecting a 1.7 percent decrease.
Cost of Support
The figures also revealed that subsidy expenditures have risen by approximately 18.8 percent over the past seven years, with the total allocation for subsidies in the draft budget for 2025-2026 reaching around 4.4 billion dinars, compared to 3.7 billion dinars in the 2019-2020 fiscal year.
Despite the decline in oil prices, which significantly lowered the cost of subsidies in the general budget—especially since fuel and gas subsidies constitute the largest portion—this decrease has not been substantially reflected in the overall subsidy expenditure of the country’s general budget.
Growing Expenses
In this context, specialized bodies are examining ways to address the growth of salary and subsidy expenses in the general budget, particularly as this increase has shifted the balance toward higher current expenditures at the expense of capital and investment spending. This growing financial pressure has led budget officials to explore solutions such as boosting non-oil revenues by reassessing government fees and service charges.
Recently, a decree was issued concerning fees and financial costs for the use of public facilities and services, mandating that relevant authorities review and re-price these fees based on the actual cost of the service and usage, while ensuring social justice and safeguarding the minimum standard of living.
Economic Changes
The review of government fees and service charges aligns with ongoing economic and social changes, reflecting the state’s need for flexibility in managing financial resources and ensuring the sustainable provision of public services. This approach aims to regulate demand for these services based on the principle of efficient public facility management while granting ministries and government departments greater flexibility in setting their own pricing mechanisms. At the same time, it ensures that social justice is upheld and that the minimum standard of living remains unaffected.
Source: Al Qabas
