Kuwait’s Non-Oil Revenues Surge, Narrowing Fiscal Deficit by $2.075 Billion

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Kuwait has witnessed a notable improvement in its fiscal deficit for the first 10 months of the current fiscal year (FY2023/24), as reported by NBK Economic Research. The deficit has narrowed by KD635 million ($2.075 billion) from December to January, now standing at KD1.1 billion ($3.595 billion).

This positive development is primarily attributed to a 15 percent month-on-month increase in oil revenues, totaling KD16.4 billion ($53.31 billion) year-to-date, and a significant 24 percent month-on-month surge in non-oil revenues, reaching KD1.45 billion. These gains have offset the 10 percent month-on-month rise in expenditures, which amounted to KD18.9 billion.

Notably, capital spending remained relatively low at KD821 million, constituting only 45 percent of the government’s full-year budget allocation of KD1.8 billion. Despite this, cumulative expenditures for the fiscal year have reached 72 percent of the total budget allocation, with two months remaining. However, the report anticipates a potential widening of the deficit by the end of March due to historical spending patterns, estimating a deficit exceeding KD3 billion.

In March, Fitch Ratings reaffirmed Kuwait’s foreign and local currency sovereign credit ratings at AA- with a stable outlook. This rating underscores Kuwait’s minimal risk of default and its robust capacity to meet financial obligations. Fitch regards Kuwait’s fiscal and external balance sheets as among the strongest among all Fitch-rated sovereigns.