A report issued by the “Economist Intelligence” Unit showed that the limited amendments to the draft general budget for Kuwait 2022/2023, which was finally approved by the Budgets and Final Account Committee in the National Assembly, it turns out that the surplus resulting from the high oil prices facilitates further postponement of the necessary reforms that face additional obstacles in the short term, as a result of the political paralysis in the country.
According to the “Economist”, oil constitutes 90 percent of government revenues in light of the continuous failure to implement reforms to the budget and expand the revenue base, which makes income highly dependent on fluctuations in international oil prices. The revised budget notes the sharp rise in oil prices since the publication of the previous draft budget last January, by raising the assumed price per barrel from 65 to 80 dollars, this will increase the assumed revenues by 25 percent to reach 23.4 billion dinars ($76.3 billion), which will generate a modest surplus of 300 million dinars.
The unit indicated that the most prominent element in the draft budget is the relative stagnation compared to previous years, public sector salaries absorb 55 percent of expenditures, while subsidies absorb 19 percent of them, the unit indicated that this reflects the failure of the government - even in the wake of the severe budget crisis caused by the collapse of oil prices in 2020 - to take austerity measures to improve the sustainability of the budget in the long term.
Source (Al-Rai Kuwaiti Newspaper, Edited)
