Kuwait budget shortage surged to a record in the year through March as oil prices plummeted and the pandemic has negatively affected the economy. The Finance Ministry said in a statement that the gap climbed 175% to $36 billion in the last fiscal year, compared with a year earlier.
The OPEC members are struggling to decrease its shortage due to its dependence on oil revenues, and high spending on civil servant wages and subsidies. Ongoing political feuds have staved off the government from passing laws to allow it to borrow and withdraw as much as 5 billion dinars a year from the Future Generations Fund, a $700 billion savings pot designed for life after oil. The country hasn’t been to the market since its debut in Eurobond in 2017.
The finance ministry said that the Income for the year through March fell 39% to 10.5 billion dinars, while spending rose 0.7% to 21.3 billion. Salaries and subsidies in the 2020-21 fiscal year accounted for 73% of spending, while 9% of expenses was on capital expenditure and infrastructure.The average price of Kuwaiti crude in the period was $42.4 a barrel. Non-oil revenue fell 6.5% to 1.7 billion dinars in the period. A 10% transfer of total revenues to the FGF didn’t take place in line with a law passed by parliament in 2020 to halt such transfers in years of deficit.