Kuwait has announced a state budget for the 2018-2019 period with a deficit of KD6.5 billion ($21.6 billion).

The deficit was estimated following the deduction of allocations for 'Future Generations Fund,' said the country's finance minister.

Dr Nayef Al Hajraf was speaking at a news conference today (January 29) to announce the state budget.

The minister said estimated total revenues amounted to KD15 billion ($49.9 billion) and expenditures hit KD20 billion ($66.6 billion) on the basis that a Kuwaiti oil barrel is worth $50.

The budget forecasts a post FGF deficit of KD6.5 billion, registering an improvement of 18 per cent
from last year’s budget, said a statement from Ministry of Finance.

The oil revenue, which comprises 89 per cent of this budget’s revenue, is projected to grow to KD13.3 billion, reflecting an increase of 13.7 per cent from 2017/2018’s budget, while the non oil revenue, which comprises 11 per cent of this budget revenue, is projected to grow to KD1.77 billion, reflecting success of fiscal and collection reforms implemented since 2016, it stated.

The MoF said the capital expenditures have been set at a healthy share of 18 per cent of total expenditures, with construction budget increased by 14.7 per cent year-on-year.

The government budget sets the government’s fiscal and economic priority for the coming year and is effective once approved by the Kuwait National Assembly. The State of Kuwait’s fiscal year starts on April 1 and ends on March 31.

Addressing the media, Dr Al Hajref said: “This is a reform budget and an expansionary budget at the same time. It is good for reform and good for the economy. Total expenditures have been capped at KD20 billion (up only 0.5 per cent from last year’s KD19.9 billion), while including a budgeted spending in industrial capital expenditures of KD2.9 billion (up 14.7 per cent from last year)."

"The country is currently instituting a structural fiscal and economic reform program, and control of expenditures is a necessary precondition for these reforms to succeed over time. Yes, the global economic outlook is improving, and the price of oil is rebounding, however that should not and will not steer us away from our path for reform. In fact, it makes our resolve for reform grow even stronger,"  stated the minister.

"We believe that reform starts with curbing spending, while maintaining a healthy rate of capital expenditures on infrastructure and minimizing the impact of our fiscal reforms on citizens," said Dr Al Hajref.

“Kuwait is in a unique financial position that enables us to introduce reform gradually, and in a controlled and responsible manner within a legislative and public environment that encourages a lively debate of the issues and the opportunities,” he added.-TradeArabia News Service