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Lower oil prices, higher public spending boost Kuwait’s budget deficit – NBK

Lower oil prices, higher public spending boost Kuwait’s budget deficit – NBK
Oil revenues dropped 18% YoY

Mubasher: Kuwait’s budget deficit reached KWD 800 million during the first 10 months of the fiscal year 2019/2020 which accounts for 2% of the country’s GDP in 2019.

After the mandatory transfers to the Future Generations Fund, the deficit increases to KWD 2.3 billion, or 5.5% of GDP, according to a report released by the National Bank of Kuwait.

The main factors contributed to the growth of deficit include the decline in oil prices over worries of excess supply and weak global demand, as well as the increase in public spending.

The price of Kuwait Export Crude declined by 6.5% year-on-year from April 2019 to January 2020, while oil production edged down 1.9% to 2.7 million barrels per day due to OPEC+ output cut agreement. Oil revenues dropped 18% YoY in the April-January period.

Moreover, capital spending fell 16% to KWD 1.4 billion, making up 42% of the full-year spending outlined in the budget.