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KUWAIT CITY, Jan 31: The Ministry of Finance said that the expected deficit in the State’s general budget for the next fiscal year (2023-2024) is estimated at 5.053 billion Kuwaiti dinars (about 16.3 billion US dollars), after calculating the expected profits of independent entities. The Ministry of Finance added in a press statement Tuesday, that it submitted the draft budget to the National Assembly for deliberation and approval, indicating that the next budget will start on the first of April 2023 and ends on March 31, 2024.
It stated that the profits of the independent agencies affiliated with the State were estimated and calculated in the budget, which raises the percentage of the contribution of non-oil revenues (after including the revenues generated from the profits of independent entities), in the budget to 19 percent. The Ministry explained that the break-even price reached $92 per barrel, while the average price per barrel in the budget was $70, which is a conservative rate, $10 less compared to the current fiscal year’s budget and about $15 less than the current price in the global market.
It stated that the total estimated revenues amounted to 19.4 billion dinars (about 62.2 billion dollars), while the estimated oil revenues amounted to 17.1 billion dinars (about 56 billion dollars), while the estimated non-oil revenues amounted to 2.2 billion dinars (about 7.2 billion dollars). It indicated that the total estimated expenditures amounted to 26.2 billion dinars (about 85.7 billion dollars), explaining that the increase in expenditures includes covering previous deficits related to the dues of the Ministry of Electricity and Water and the Ministry of Oil, and the cash allowance for buying earned leave from workers in the public sector.
The Ministry of Finance said that the state is following a tight plan to gradually increase nonoil revenues over the coming years, in addition to reforms to ration and rationalize expenditures and increase spending efficiency, which will gradually come into effect. It indicated that despite the increase in expenditures due to mostly non-recurring items, one of the most prominent positive indicators in the next budget is the rise in the contribution of non-oil revenues (after including revenues from the profits of independent entities) to 19 percent for the first time, as a result of decisions taken to improve state revenues and maximize savings.
It explained that the budget for the next fiscal year is an unusual budget, as it is loaded with non-recurring expenses and accrued entitlements from previous years, including the payment of accumulated dues to the Ministry of Electricity and Water about 745 million dinars (about 2.4 billion dollars) and the Ministry of Oil amounts to 319 million dinars (about 1 billion dollars).
It pointed out that among the expenses is also the cost of the expected increase in the quantities of fuel consumed to operate the electric power production stations, the rise in oil and fuel prices for local consumption and distribution, as well as covering the costs of residential areas (Al- Mutlaa City – South Abdullah Al- Mubarak – South Khaitan) and the infrastructure and public facilities for the housing project south of Saad Al-Abdullah City about 586 million dinars (about 1.9 billion dollars) to estimate 21,815 jobs for new appointments.
The Ministry of Finance also stated that one of the most prominent elements of the increase in expenditures is covering the cash allowance for the sale of the leave balance of workers in the public sector, amounting to 481 million dinars (about $1.5 billion). It stated that it had set conservative expectations for oil revenues, as the average price of a barrel in the budget is $70, which is a conservative rate, $10 less compared to the current fiscal year’s budget, and about $15 less than the current price in the global market, which leads to this expected deficit in the budget. It emphasized the keenness to load the budget with structural financial reforms, including calculating the profits of independent entities in the budget, indicating that the State today is following a tight plan to gradually increase non-oil revenues over the coming years, in addition to reforms to legalize and rationalize expenditures, which will gradually enter into force to meet financial and economic challenges and hedge against any emergency. (KUNA)