Kuwait’s budget deficit falls to $9.7 bn in FY 2021/22

Oil revenues recorded about $52.7 bn
Kuwait’s budget deficit falls to $9.7 bn in FY 2021/22
Kuwait's budget deficit declines to $9.7 bn

Kuwait’s budget deficit amounted to 2.99 billion Kuwaiti dinars ($9.71 billion) in FY 2021/22, down 72.2 percent from the previous year, according to the country’s finance ministry.

Kuwait’s oil revenues recorded about 16.22 billion dinars ($52.69 billion) in FY 2021/22, up 84.5 percent from the previous year, the ministry said.

The financial year in Kuwait ends in March.

Read more: Kuwait’s parliament approves budget with the lowest deficit in 9 years

Standard & Poor (S&P)’s has maintained Kuwait’s long- and short-term sovereign credit ratings in foreign and local currencies at A+ with a negative outlook.

S&P stated that the negative outlook for the rating reflects risks related to the government’s ability to overcome institutional obstacles that prevent it from implementing a strategy to finance the budget deficit in the future over the next twelve to twenty-four months.

The agency also predicted that Kuwait’s average budget deficit would reach 12 percent of GDP by 2025.

Moreover, finance and insurance company Fitch Solutions forecasted that Kuwait’s real GDP would grow by 8 percent in 2022, the fastest rate since 2012, and 4.6 percent in 2023, noting that this improvement is being driven by an increase in oil production and prices.

The firm also observed that monetary policy will be tightened in the final four months of the year, though it believes that the Central Bank of Kuwait (CBK) will maintain the discount rate in 2023. It further noted that Kuwait’s current account surplus will likely increase from 26.9 percent of GDP in 2021 to 28.7 percent in 2022 as a result of increased oil exports.