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Kuwait records first budget surplus in nine years thanks to soaring oil prices

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Over the course of a year, Kuwait brought in 28.8 billion dinars, a 54.7 per cent increase over the previous year

According to the Ministry of Finance, Kuwait recorded its first budget surplus in nine years in 2022–2023 as a result of high oil prices.

According to the most recent data, the nation had a surplus of 6.4 billion Kuwaiti dinars ($20.86 billion) at the end of its fiscal year on March 31.

Over the course of a year, Kuwait brought in 28.8 billion dinars, a 54.7 per cent increase over the previous year.

Oil revenue increased by 64.7% over the previous year, accounting for nearly 93% of the government’s total income of 26.71 billion dinars. Throughout the fiscal year, the average price of oil was $97.1 a barrel.

According to the ministry, total spending was 22.37 billion dinars, which is 2.6 per cent less than it was a year earlier.

According to Kuwait’s Minister of Oil Saad Hamad Nasser Al-Barrak, “Kuwait enjoys a strong financial position, considerable reserves, and monetary and financial stability, all of which insulate us from the short-term repercussions of oil market swings.”

The minister made his remarks only a few weeks after promising to invest more than $300 billion in the nation’s energy sector by 2040.

According to figures from the ministry, the emirate’s daily production rate for the fiscal year that ended on March 31 reached 2.693 million barrels, or almost 7% of the world’s reserves.

Its budget has consistently had deficits since the collapse of oil prices in 2014. However, Kuwait experienced a recovery as a result of the rise in oil prices following the conflict in Ukraine.

According to a local newspaper earlier this month, which cited a member of parliament, the country’s draft budget for the upcoming fiscal year predicted a deficit of 6.8 billion dinars due to reduced oil prices and volumes.

According to a report from Al-Dustor posted by the parliament’s Twitter account and citing MP Osama Al-Zaid, the proposed budget for the fiscal year beginning April 1 projected oil revenue of 17 billion dinars, down 19.5% from 2022-2023.

According to Al-Zaid, the draft budget was based on an oil price of $70 per barrel.

Despite moving more slowly than its Gulf neighbours in terms of diversifying its sources of income, Kuwait has cooperated with production cuts mandated by the Organization of the Petroleum Exporting Countries and its allies led by Russia.

Fiscal reform in the OPEC member state has been impeded for years by disputes between successive appointed governments and elected parliaments, including a debt law that would enable Kuwait to access international markets and reduce its heavy reliance on oil, according to Reuters.

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