KUWAIT CITY, July 29: Kuwait’s budget deficit narrowed to KD 3.3 billion ($11 billion) in the fiscal year that ended in March, helped by higher than expected oil prices, the finance ministry said on Monday.
The Ministry of Finance announced the State of Kuwait’s closing accounts for the fiscal year ending March 31, 2019. The State’s accounts recorded KD 20.558 billion in revenue, KD 21.849 billion in expenditure, and closed with a fiscal deficit of KD 3.346 billion after accounting the transfer of 10 percent of total revenue to the State’s Future Generations Fund (FGF) as mandated by law.
The State of Kuwait’s fiscal year starts on April 1 and ends on March 31. The Kuwait Minister of Finance HE Dr Nayef Al Hajraf said, “For the second year in a row, the State of Kuwait’s Non-oil revenues continued to grow by 24 percent year-on-year, capital expenditure remains a healthy proportion of the total expenses at 14 percent, and we estimate capex will reach 17 percent during the current fiscal year to stimulate economic growth and to serve Kuwait’s 2035 vision, New Kuwait”.
■ Oil revenue: KD 18.4 billion, up 29 percent from last year
■ Non-oil revenue: KD 2.13 billion, up 24 percent from last year
■ Total Revenue: KD 20.558 billion up 28.5 percent from last year
■ Average Kuwaiti crude selling price for the fiscal year: $68.62 per barrel
■ Wages and subsidies: KD 16.334 billion, constituting 75 percent of all expenditure.
■ Capital Expenditures: KD 3.032 billion, constituting 14 percent of all expenditure.
■ Total Expenditures: KD 21.8 billion up 13.5 percent from last year’s closing accounts.
■ The recorded fiscal deficit for the year pre-FGF transfer is KD 1.29 billion. The recorded fiscal deficit post-FGF transfer is KD 3.346 billion, down 31 percent from last year. This is the fifth consecutive year of deficits for the State of Kuwait.
■ By law, the State transfers 10 percent of total annual revenue to the Future Generations Fund (also known as Kuwait’s Sovereign Wealth Fund) managed by the Kuwait Investment Authority. This year’s transfer total was KD 2.056 billion.
■ The actual deficit for the year ending on March 31, 2019 will be covered by withdrawls from the General Reserve Fund (GRF, the State’s treasury) in the absence of a law governing the issuance of sovereign bonds. The last active debt law expired in October 2017.
In Kuwait, all laws must pass through its freely-elected Parliament.
■ By law, the Closing Accounts do not include revenue from the FGF, which is managed by the Kuwait Investment Authority.
All investment revenue from FGF activities are reinvested by the Fund.