Kuwait Records The First Surplus In Nearly A Decade In The 2022/2023 Fiscal Year
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Kuwait has recorded the first surplus in nine years within the 2022/2023 financial year that ended in March. The Kuwaiti finance ministry has attributed the surplus to the surge in oil prices reported in 2022.
Kuwait posts its first surplus in nine years
The majority of Kuwaiti revenues come from hydrocarbon, and at the end of 2022/2023 it had a surplus of KD 6.4 billion, equivalent to $21 billion. The deficit during the period came to KD 4.3 billion, equivalent to $14 billion.
The finance ministry said that the surplus was the first that has been seen within nine years. Over 92% of the revenues reported during the period were generated from oil after the prices increased after the invasion of Ukraine by Russia last year.
The oil revenues during that fiscal year that commenced on April 2022 came to KD 26.7 billion, which was a 64% increase from the previous year. Moreover, the average price of an oil barrel during the period was $97.1, which is a gain of 21.4% compared to the previous fiscal year. The output that was reported during the period was 2.7 million barrels daily.
The draft budget for the 2023/2024 financial year was calculated at the price of $70 per barrel. The revenues during the current financial year are also expected to decline following a plunge in oil prices. The draft budget also has an increasing deficit, with the total revenues anticipated to decline to around $63.8 billion.
Kuwait records an increase in revenues
The Kuwaiti financial ministry also noted that the actual revenues during the period hit KD 28.8 billion, equivalent to $93.8 billion, representing a 54.7% increase in the 2022/2023 fiscal year. The oil proceeds represent 92.7% of the total income. The oil revenues during the period reached KD 26.7 billion, equivalent to $87 billion, representing a 64.7% gain.
The total expenditures during the period came to KD 22.4 billion, equivalent to $73 billion, which was a 2.6% drop. Wages and subsidies amounted to 78% of the total expenditure, with actual capital spending increasing to 9% of the total expenditure.
The Acting Minister of Finance, Dr. Saad Al-Barrak, had said that Kuwait had a solid financial position, massive reserves, and monetary and financial stability. These factors showed that the state had risen above the short-term challenges and seized the opportunities that came from these challenges.
Kuwait is one of the largest oil countries globally, and it accounts for 7% of the crude reserves globally. The country also has minimal debt and has one of the stingiest sovereign wealth funds globally.
However, the country is also affected by standoffs between governments and elected lawmakers. Political instability has also been a challenge in the country, which has spooked investors and made it challenging to implement economic reforms.
In under one year, Kuwait is now in its fifth government that was sworn in last month. The general election resulted in an opposition-controlled parliament, making it more challenging for the government to realize its plans.
