Kuwait’s parliament Thursday passed the budget for the 2017/18 fiscal year, projecting a deficit for the third year in a row due to a slump in oil prices.
The deficit is projected to be $21.6 billion (19.3 billion euros), with revenues estimated at $43.6 billion and expenditure at $65.2 billion.
Oil income, calculated at $45 a barrel, is projected at $38.4 billion, up 36 percent from the estimated last year’s budget.
Finance Minister Anas al-Saleh told parliament that provisional figures showed an actual shortfall of $21.3 billion in the 2016/17 fiscal year, which runs from April 1 to March 31 in Kuwait.
The OPEC member posted healthy surpluses for 16 fiscal years in a row before posting a deficit in the 2014/15 fiscal year.
Saleh said Kuwait had faced “extremely difficult challenges” in the past three years in particular, as crude prices plummeted due to a production glut.
Kuwait’s government had financed the shortfall through state reserves, which are estimated at about $600 billion, and through bond issues, Saleh said.
The government has issued domestic bonds worth $7.2 billion and international bonds worth $8 billion, according to the minister.
Despite the sharp slide in oil prices since 2014, oil income is still projected to constitute 88 percent of Kuwait’s total revenues.
Lawmakers have criticised the government’s failure to diversify income sources in Kuwait, where the budget still relies heavily on oil.
As part of efforts to reduce the deficit, the emirate in September raised petrol prices and plans to increase electricity and water charges.
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