Kuwait City: Kuwait’s Fiscal Deficit Skyrockets to $5.23 Billion
In a shocking turn of events, Kuwait has registered a massive deficit of 1.6 billion dinars ($5.23 billion) in the fiscal year 2023/24. This comes as a stark contrast to the surplus of 6.4 billion dinars in the previous year, as reported by the finance ministry in a statement released on Wednesday.
Oil Revenues Plummet as Kuwait Struggles to Diversify
Kuwait’s oil revenues took a major hit, dropping to 21.528 billion dinars in FY 2023/24. This decline in revenue can be attributed to the oil price of $86.36 per barrel, a significant decrease from 26.713 billion dinars in the previous year. The Gulf state has faced challenges complying with production cuts by the OPEC+ producer group amidst lower oil prices, while lagging behind its Gulf neighbors in diversifying revenue sources.
Expenditures Soar as Kuwait Grapples with Financial Woes
On the flip side, expenditures in Kuwait reached a staggering 25.206 billion dinars, compared to 22.370 billion dinars in the previous year. With Kuwait’s fiscal year ending on March 31, the country faces mounting financial pressures.
Challenges Ahead for Kuwait’s Economic Landscape
Despite holding some of the world’s largest oil reserves and boasting strong fiscal and external balance sheets, Kuwait struggles with political and institutional gridlock. This has hindered investment and reforms aimed at reducing the country’s heavy reliance on oil. As Kuwait grapples with economic challenges, the road ahead remains uncertain.