Kuwait projects 25% smaller deficit in 2018-2019

Kuwait is forecasting a nearly 25 per cent smaller budget deficit in 2018-2019 than the current fiscal year, according to reports.

Kuwait Times cited sources as confirming the government expected a KD4.5bn ($14.93bn) deficit, increasing to KD6bn ($19.9bn) after contributions to its sovereign wealth fund, in the next fiscal year beginning on April 1.

This is roughly 23.46 per cent less than the projected deficit of KD7.89bn ($26bn) for the 2017-2018 budget ending on March 31.

The reduced deficit will come in part due to a 15-20 per cent increase in revenues to KD15.5bn ($51.4bn) from KD13.3bn ($44.1bn) in the current fiscal year.

This will be supported by a 5-10 per cent increase in non-oil revenues rising from KD1.6bn ($5.3bn to KD1.8bn ($5.97bn) due to increases in water, electricity and healthcare prices.

Read: Kuwait to introduce higher healthcare fees for foreigners

Rising oil prices will also increase crude revenues by 12 per cent to KD13.5bn ($44.79bn), according to the forecast. Brent crude has risen from just over $50 a barrel to nearly $68 a barrel since March/

But spending is expected to slightly increase to KD20bn (466.36bn) and the cost of energy subsidies will rise to KD3.2bn ($10.6bn).

Expenditure on investment is expected to rise from KD3.4bn ($11.28bn) to KD3.6bn ($11.94bn) and the budget allocated to investment projects is also expected to increase.

The publication said state policies to reduce the deficit, which has been growing since the 2015-2016 fiscal year, could set maximum limits on spending and place greater control on a system of treatment abroad, which is costing KD185.5m ($615.5m) a year.