Kuwait posts smaller deficit for last fiscal year on higher oil

Kuwait posts smaller deficit for last fiscal year on higher oil

Kuwait’s fiscal deficit narrowed to KD3bn ($9.8bn) in the year through March, a drop of more than 72 per cent on the previous year as oil prices recovered.

The OPEC member recorded the highest non-oil revenue in seven years, up 38.5 per cent to KD2.4bn, according to a Ministry of Finance statement on Sunday. Oil revenue surged 84.5 per cent to KD16.2bn.

Years of political tensions have thwarted Kuwait’s fiscal reforms and stymied efforts to diversify the oil-reliant economy and promote foreign investment. Squabbling between previous elected legislatures and cabinets has prevented the government from passing laws to allow it to borrow and withdraw from the Future Generations Fund (FGF) – a more than $700bn savings pot designed for life after oil.

The country hasn’t been to the market since a debut Eurobond in 2017. Lawmakers have said the government should better manage its finances and fight corruption before resorting to debt.

“Naturally, the rebounding oil price in the second half of the fiscal year helped shore up Kuwait’s revenue,” said Finance Minister Abdulwahab Al-Rasheed. “Kuwait has one of the strongest sovereign balance sheets in the world, with one of the lowest sovereign debt to GDP levels globally, and a strong rebounding economy.”

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