Kuwait announced Monday that it estimates a budget deficit for the 2019-2020 fiscal year could soar to reach $25.3 billion, as Finance Minister Nayef al-Hajraf explained, adding that the deficit will be fully covered from the national reserves.
Kuwait annually earmarks 10 percent of its revenues and transfers it to the Future Generations Fund (FGF) - managed by the Kuwait Investment Authority (KIA), representing Kuwait's sovereign fund.
Kuwait plans to spend $74 billion in total expenditure based on an average of $55 per barrel of Kuwaiti crude oil, the minister told a press conference.
Hajraf also announced that total revenues stand at $54 billion, $47.7 billion of which are oil revenues, while non-oil revenues amount to $6.1 billion. He clarified that capital spending accounts for 17 percent and 12 percent comes from other expenses.
The budget has been designed to stimulate economic growth by maintaining capital expenditure levels of 17 percent, Hajraf pointed out.
"We are firmly on the path towards fiscal reforms," he emphasized, citing stricter measures dealing with government debt collection. The Kuwaiti government has approved the fiscal year 2019-2020 budget, focusing on more transparency and efficiency.
The Minister stressed the need for each government institution to abide by the budget decision, saying the Ministry of Finance is the financial director of these entities which must adhere to the limit of government expenditure without exceeding it and must cooperate with the financial supervisors.
As for the foreign state investments, Hajraf assured that Investment Authority follows a very strict investment policy of 65 years, and there is no fear of investments in Europe, especially the UK, in light of Brexit developments.
