Kuwait projects record deficit on falling oil income

OPEC member Kuwait projected a record budget deficit for the fiscal year starting April 1 on the sliding price of oil, the finance ministry said today.
The shortfall for the 2016-17 fiscal year is estimated at 11.5 billion dinars (USD 38 billion) or a massive 30 per cent of gross domestic product (GDP) due to a sharp decline in oil revenues, the ministry said on its Twitter account.
Spending was estimated at 18.9 billion dinars, just 1.6 per cent lower than in the current year, the ministry said.
Revenues were projected at 7.4 billion dinars (USD 24.4 billion) of which oil income was estimated at USD 19.1 billion or just 78 per cent of the public revenues.

In the past, income from oil contributed more than 94 per cent of revenues in the Gulf emirate, before the decline in crude prices.
The budget was approved at a joint meeting of the cabinet and the supreme planning council on Wednesday night.

The oil income estimate for 2016-17 is 46 per cent lower than in the current year, and 74 per cent below the actual oil revenues in 2014-15, the ministry said.
The oil revenues are calculated on the basis of a crude price of USD 25 a barrel, down from the current year's $45 a barrel.
The price of Kuwaiti oil dived to as low as USD 19 a barrel last week. Currently it is hovering around USD 23 a barrel.

Kuwait has projected a shortfall of USD 23 billion in the current fiscal year, the first deficit after 16 years of surplus.
The Gulf state, which has a native population of just 1.3 million, has built around USD 600 billion in fiscal reserves in those years.
Figures posted on the finance ministry website show that actual income earned in the first three quarters of 2015/2016 fiscal year is USD 37.6 billion, or 46.2 per cent lower than last year.
The Gulf state posted a provisional deficit of $8 billion in the first nine months. The shortfall normally swells in the last quarter due to accounting adjustments.

All the Gulf Cooperation Council (GCC) states -- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates -- have posted deficits after oil prices lost three quarters of their value since mid-2014.
The Gulf states have announced a series of austerity measures that included raising the prices of fuel products, electricity, water and others.
Kuwait has liberalised the price of diesel and kerosene and is considering cutting subsidies on other services.