Kuwait says 2026-27 fiscal gap to widen on lower oil prices

Kuwait expects its fiscal deficit to widen sharply during the 2026-27 year as government revenue declines on lower oil income, the draft budget shows.

The deficit is projected at KD9.8 billion ($32 billion), surging 54.7 percent over the current fiscal year’s shortfall, the state-run Kuna news agency reported, quoting finance minister Yaqoub Al-Refaei.

Total revenue is forecast to fall 10.5 percent to KD16.3 billion as oil income drops more than 16 percent to KD12.8 billion, the minister said.

However, non-oil revenue is seen rising nearly 20 percent to KD3.5 billion.

Spending is expected to increase 6 percent to KD26 billion in 2026-27, with 76 percent allocated to salaries and subsidies, 12 percent to capex and the remaining 12 percent to other expenditure.

The budget is based on an oil price assumption of $57 per barrel, Al-Refaei said.

He said the country needs oil at $90.5 per barrel to balance its budget.

This month Kuwait launched two projects – Shahin (falcon) and Saif (sword) – in an effort to attract international oil companies as it seeks to increase crude production capacity to 4 million barrels a day.

The country’s recoverable oil deposits are officially estimated at 101 billion barrels.

Further reading:

• Kuwait buys 20% stake in Brazilian oil project from Shell
• Non-oil trade between UAE and Kuwait up 9% last year
• Kuwait looks to the cloud as power grid feels the strain