The Ministry of Finance announced the submission of the draft general budget for the fiscal year 2023-2024 to the National Assembly in preparation for deliberation and approval, and it included expenses of KD 26.3 billion, including capital spending of KD 2.4 billion, compared to expected revenues of KD 19.5 billion, and it is estimated that the general budget will record a deficit. Financially, it amounts to KD 6.8 billion (before calculating the profits of the independent entities), while the final deficit after calculating the profits of the independent entities amounts to KD 5 billion.
In addition, the draft budget expected the collection of revenues of KD 19.5 billion, a decrease of 16.9 percent from the revenues expected to be collected during the current year amounting to KD 23.3 billion, while the expected oil revenues decreased by 19.5 percent to become KD 17.1 billion, compared to KD 21.3 billion during the current year, while the revenues witnessed an expected increase of 9.9 percent to reach KD 2.2 billion, compared to KD 2 billion this year.
Moreover, budget expenditures witnessed a large jump by 11.7 percent, after their total reached KD 26.2 billion, compared to 23.5 billion this year. Salaries and subsidies accounted for 80 percent, after the total salaries and the like amounted to about KD 14.9 billion, an increase of 13.3 percent over the salaries of the previous year amounting to KD 13.3 billion. The capital expenditures’ allocations in the draft budget for the new year decreased by about 15.2 percent to become KD 2.4 billion, after it was allocated for 2.9 billion in the current fiscal year.
The ministry indicated that despite the increase in expenditures due to items most of which are not recurring, one of the most prominent positive indicators in the next budget is the increase in the contribution of non-oil to 19 percent for the first time, as a result of decisions taken to improve state revenues and maximize savings. The ministry also indicated that the budget for the next fiscal year is loaded with non-recurring expenses and accrued benefits from previous years, including an amount of KD 1.064 billion only for the Ministry of Oil and the Ministry of Electricity and Water, in addition to KD 481 million to cover the selling of vacations for workers in the public sector. The ministry is also keen to charge the budget with structural financial reforms, including calculating the profits of independent entities in the budget, noting that the state today is following a tight plan to gradually increase non-oil revenues over the coming years, in addition to reforms to legalize and rationalize expenditures, which will gradually enter into force to face financial and economic challenges and hedge against any emergency.
The ministry stated that one of the most prominent elements of the increase in expenditures is the payment of accumulated dues to the Ministry of Oil and the Ministry of Electricity and Water amounting to KD 745 million, and the Ministry of Oil amounting to KD 319 million, with a total of KD 1.064 billion, in addition to the cost of the expected increase in the quantities of fuel consumed to operate electric power plants, and the increase oil and fuel prices for local consumption and distribution, as well as covering the costs of residential areas in Al-Mutlaa City, South Abdullah Al-Mubarak and South Khaitan, infrastructure and public facilities for the southern Saad Al-Abdullah housing project, and about KD 586.8 million to estimate 21,815 jobs.
In addition, the average price of a barrel in the budget was USD 70, which is USD 10 less compared to the current fiscal year’s budget, and about USD 15 less than the current price in the global market. Oil production costs increased by 22.6 percent to reach KD 3.9 billion, despite the reduction in production volume to 2.676 million barrels per day, compared to the previous year when the production volume was estimated at 2.730 million barrels per day.
Figures from the budget: increasing oil production costs by 22.6 percent to reach KD 3.9 billion, despite the reduction in production volume; oil revenues decreased by 19.5 percent from KD 21.3 billion to KD 17.1 billion; non-oil revenues increased by 9.9 percent to reach KD 2.2 billion, compared to KD 2 billion; reducing capital expenditure provisions by about 15.2 percent, to become KD 2.4 billion, compared to KD 2.9 billion; the composition of expenses was distributed as 91 percent of current expenses, and about 9 percent of capital expenses; KD 122.4 million were allocated to cover the costs of medicines in the Ministry of Health; and, KD 35 million for spending on road engineering and highway maintenance.
The increase in expenses for the salaries item and the like in the draft budget for the new fiscal year was estimated at about 13 percent, after an amount of KD 14.9 billion was allocated, an increase of KD 1.7 billion over the salaries of the current year, in which the total salaries amount to KD 13.1 billion, and the Finance Ministry justified this the increase is due to several reasons, including an estimate of 21,815 jobs for new appointments, and an inevitable increase in the salary item, at a cost of KD 586.8 million; an increase of KD 481.8 million as a result of the decision to replace the cash balance for the sale of vacations; and, allocating KD 401 million to the Social Insurance Corporation.
The cost of subsidies provided by the state to citizens jumped by 34.2 percent to reach KD 5.9 billion, compared to KD 4.4 billion in the current year. The ministry justified the reason for this increase as follows:
1- Increasing fuel subsidies needed to operate electricity and water stations, in addition to subsidizing petroleum products, with an increase of KD 1.158 billion.
2- Increasing the allowances for scholarship students by about KD 140 million.
3 – An increase in the item of reducing living costs by about KD 75 million.
4 – An increase in the rent due to the issuance of the decision to pay the amounts due to citizens for cases of exchange and assignment by about KD 68.5 million.