The chief reason for the budgeted fiscal gap is a $7,000 million payment of arrears to the state pension fund. Expenditure is budgeted to rise by 43 per cent from the previous year to KD 10,300 million ($35,621 million) while revenues are projected to increase by 88 per cent to KD 8,610 million ($29,690 million).

The main reason for the forecast leap in revenues is a departure from the traditionally conservative estimation of the likely oil price. The previous budget was based on the assumption of $21 a barrel while for 2006/07, the assumed average price is $36 a barrel – the highest forecast used by any of the GCC states. The budget will now be debated in the National Assembly (parliament).