The cabinet has approved the draft budget for 2005/06, projecting a fiscal deficit of KD 2,330 million ($8,034 million), an 18 per cent decrease from the 2004/05 budget. Total expenditure is projected to climb by almost 11 per cent to KD 6,930 million ($23,896 million), while total revenues are estimated at KD 4,600 million ($15,862 million), up 39 per cent. The budget now goes to the National Assembly (parliament) for approval.
Much of the projected revenue rise is based on a more realistic average oil price forecast of $21 a barrel, compared to the conservative $15-a-barrel figure used in previous budgets. Oil income projections of $13,300 million mean that about 85 per cent of state revenue will come from the hydrocarbons sector. Kuwait customarily projects budget deficits, but end-of-year balance sheets tell a different story, with the state instead posting large surpluses. With oil prices averaging over $30 a barrel, the government's revenues for this year will likely reach $30,000 million. www.meed.com/economy