KD 6bn deficit seen in 2018-2019 state budget
Expected revenue increase by 15-20 percent
KUWAIT: The new state budget is expected to have around KD 4.5 billion in deficit, which could increase up to KD 6 billion when factoring in the 10 percent deducted from total revenue for the future generations’ fund. The finance ministry plans to review the 20182019 budget with the parliament this month pending passing it according to the constitution. The new budget will be dominated by various reform measures to help fight the hardships Kuwait’s economy is facing while maintaining strong governmental investment expenditure to activate the economy and continue the 2035 economic development plan.
Revenues are expected to increase by 15-20 percent to touch KD 15.5 billion compared to KD 13.3 billion in the current fiscal year. The sources elaborated by saying that the increase would be achieved through a 5-10 percent increase of non-oil revenues such as the fees collected for water, electricity, health and some other services (from KD 1.6 billion to KD 1.8 billion) and through increasing oil prices by 12 percent, which is expected to increase oil revenues to KD 13.5 billion.
On the other hand, expenditure will slightly increase to around KD 20 billion despite increasing fuel, water and electricity prices. The cost of energy subsidies will increase in the new budget to over KD 3.2 billion and the cost of payroll is expected to reach KD 11 billion through coordination between the finance ministry and other government bodies with the aim of stopping wasteful spending. In addition, expenditure on investment is expected to rise from KD 3.4 billion to KD 3.6 billion.
General state spending policies might cut down expenses to face the deficit that has been growing since 2015-2016 by setting maximum limits on spending in addition to having more control on the budget allocated for treatment overseas, which is currently KD 185.5 million. Also, the budget allocated for development projects is expected to increase to help execute them within schedule without delays.
Rented buildings
In other news, Finance Minister Dr Nayef Al-Hajraf said that the total number of buildings rented by state department were 294 from 2014 till 2017 with a total annual rent cost of KD 40,536,000 and that some lease contracts with the total value of KD 14 million had been terminated to cut down expenses. Hajraf stressed that the finance ministry is not responsible for constructing buildings for state departments and is only responsible for allocating certain amounts in each department’s budget for constructions. Monitoring and supervisory bodies’ approval is conditioned prior to renting any buildings.
Separately, Minister of Social Affairs and Labor and Minister of State for Economic Affairs Hind Al-Sabeeh said that over 77 entrepreneurs have benefited from the decision made to allocate special outlets to market their products in various co-operative societies. Sabeeh added that a decision on allocating 20 percent of the ministry’s tenders for small entrepreneurs has been activated.