Kuwait's Parliament on Wednesday approved the draft budget for 2023-24, which forecasts a fiscal deficit of 6.8 billion dinars ($22 billion).
Kuwait recorded a budget surplus of 6.368 billion dinars in the fiscal year that ended on March 31, its first in nine years, the Finance Ministry said last month, as oil revenue jumped almost 65 per cent on higher oil prices.
But Kuwait has had to comply with production cuts by the Opec+ producer group amid lower oil prices this year while making slow progress on diversifying revenue sources compared with its Gulf neighbours.
Deputy Speaker Mohammed Almotair said that legislators had approved the government's budget which had been discussed by the parliament’s budget and final account committee and is based on an assumed average oil price of $70 a barrel.
Total budget spending is projected at 26.3 billion dinars while total revenue is estimated at 19.5 billion dinars in the fiscal year, of which oil revenue is estimated at 17.2 billion dinars.
Deputies approved the budget with 47 votes in favour, 12 objections and two abstentions.
Speaking after the parliamentary session, acting Finance Minister Saad Al Barrak, who is also Oil Minister, told Reuters that there was no budget deficit in the first four months of the current fiscal year that began in April.
Kuwait holds some of the world's largest oil reserves and has strong fiscal and external balance sheets, but political and institutional gridlock has hampered investment and reforms aimed at reducing its heavy reliance on oil.
Among these is a long-awaited public debt law which would allow the government to tap global debt capital markets, but it has drawn opposition from MPs.