Kuwait’s public budget deficit doubled 7 times during the first 5 months of the current fiscal year (2021/2020), compared to the same period in the previous fiscal year, according to official data issued by the Ministry of Finance. The general budget recorded a deficit of KD1.413 billion from the first of April to the end of last August, compared to a deficit of KD488.23 million for the same period last year, with an increase in the deficit of 190%, and a value of KD925.46 million, Al Rai daily reported.
This comes under the pressure of a sharp decline in revenues by more than half, while state spending on salaries and the like witnessed a sharp decline, while the state continued to spend on grants at the same pace. The deficit rate rises again if compared with the state’s financial situation during the same period from last year without deduction for the Kuwait’s Reserve Fund for Future Generations as the state’s general budget achieved by the end of August 2019 a surplus of KD247.65 million dinars, bringing the deficit to 670%, with a value of KD1.66 billion to become KD1,413 billion at the end of August 2020.
This comes as the state’s total public revenues witnessed a sharp decline of 55% during the first 5 months of the current fiscal year, and by about 4 billion dinars, achieving 3.3 billion dinars at the end of last August compared to 7.35 billion in revenues at the end of August 2019.
Kuwait’s budget had previously been built on an estimated price of $50 per barrel of oil, but the coronavirus crisis prompted Kuwait to amend the budget by reducing its various items by about 20%.
According to expectations issued by the Al-Shall Center for Economic Consulting (Kuwaiti), according to the data of the first six months of the fiscal year, the general budget in Kuwait for the fiscal year 2021/2020 will record a deficit of KD15 billion dinars ($49 billion).
The country’s public debt is KD3.3 billion dinars ($11 billion), and the government presented to Parliament a bill that would allow it to borrow $65 billion over 30 years, including $17 billion in 2020, but Parliament rejected it.
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