Capital expenditure is expected to see a big boost next fiscal year in Kuwait with planned budget spending of KWD3.5 billion ($11.56 billion) as compared to KWD2.9 billion in 2020/21, a y-o-y increase of 20%.
This compares to an increase of 9.6% expected in 2020/21 as compared to final accounts published for the year 2019/20, said a Kamco Invest report.
Kuwait’s Ministry of Finance has unveiled the draft budget for 2021/2022 with a 13.8% decline
in forecast deficits of KWD12.1 billion ($40 billion) as compared to an expected deficit of
KWD14 billion ($46.2 billion) for the current year 2020/2021.
Both revenues and expenditures are expected to increase next year with a revenue target of KWD10.9 billion vs expenditure of KWD23 billion.
In terms of revenues, oil would continue to account for the bulk of state revenues next
year. Total oil revenue is expected to reach KWD9.1 billion as compared to KWD5.6 billion estimated for the current fiscal year. The share of oil revenues is expected to increase from 75% in the current fiscal year to 83.5% in 2021/22, it said.
On the other hand, non-oil revenues are expected to decline by 3.8% next fiscal year to KWD1.8 billion as compared to KWD1.87 billion expected in 2020/21 resulting in a decline in its share from 25% in the current fiscal year to 16.5% in 2021/22.
On the expenditure side, planned spending is expected to increase for the second consecutive year. Total expenses in 2021/22 is expected to reach KWD23 billion led by higher spending in all off the expense components.
The estimates for 2020/21 clearly shows the impact of Covid-19 on states finances. Total
revenues during 2020/21 is expected to have plunged 56.4% solely led by 63.4% expected
decline in oil revenues, whereas non-oil revenues are expected to increase marginally by
1.3% to KWD1.87 billion from KWD1.85 billion during the last fiscal year. Oil revenues are
expected to come in at KWD5.6 billion vs KWD15.4 billion in 2019/20 mainly due to the decline in oil prices during the year coupled with curbs on production as part of the Opec+ agreement. - TradeArabia News Service