Kuwait projects KD 2.425 billion budget deficit for 2024/2025
While developments in oil revenues remain the dominant factor, the country likely achieved oil revenues of around KD 1.513 billion in August.
• By the end of August 2024, Kuwaiti oil averaged $78.7 per barrel, 12.4% higher than the $70 estimated in the budget.
• Kuwait’s total oil revenues are projected to reach KD 19.701 billion for the current fiscal year which is about KD 3.467 billion higher than the budget estimate of KD 16.234 billion for the fiscal year.
• With the addition of about KD 2.428 billion in non-oil revenues, the total budget revenues for the current fiscal year are expected to reach around KD 22.130 billion.
The weekly report by the Al-Shall Consulting Companynoted that by the end of August 2024, the fifth month of the fiscal year 2024/2025 had concluded, with the average price of Kuwaiti oil at $78.7 per barrel. This is approximately $8.7, or 12.4%, higher than the $70 per barrel estimated in the current budget, according to Al Jarida newspaper.
The report stated that the last fiscal year 2023/2024, which ended in March, achieved an average Kuwaiti oil price of approximately $84.4 per barrel.
The average barrel price for August 2024 is about 6.7% lower than the average price for the previous fiscal year and approximately $12.0 lower than the new breakeven price of $90.7 per barrel in the current budget, as estimated by the Ministry of Finance, following the cessation of the 10% revenue deduction for the Future Generations Reserve.
The report added that Kuwait likely achieved oil revenues of around KD 1.513 billion in August. Assuming production levels and prices remain stable—which may not occur—the total oil revenues, after deducting production costs, are projected to reach KD 19.701 billion for the current fiscal year. This is about KD 3.467 billion higher than the budget estimate of KD 16.234 billion for the fiscal year.
The report stated that with the addition of approximately KD 2.428 billion in non-oil revenues, the total budget revenues for the current fiscal year are expected to reach around KD 22.130 billion.
By comparing this figure with the expenditure appropriations of about KD 24.55 billion, the general budget for the current fiscal year 2024/2025 is likely to record a deficit of KD 2.425 billion. However, the dominant factor remains the developments in oil revenues.
