Kuwait City: Kuwait’s parliament on Thursday passed a record $82.6 billion budget for 2014/2015 fiscal year, projecting a $11.2 billion shortfall on the basis of a conservative oil price.
The spending figure of 23.21 billion dinars is 10.5 per cent higher than estimates in the past fiscal year of 21 billion dinars.
Revenues are estimated at 20.07 billion dinars ($71.4 billion), up almost 11 per cent on last year’s projections.
Forty-nine MPs voted in favour of the budget while two members rejected it.
It passed despite strong criticism from many MPs over increases in spending, particularly on wages and subsidies.
During the debate, Finance Minister Anas Al Saleh said public spending had increased six-fold during the past 13 years.
Wages for civil servants are projected at 5.6 billion dinars while subsidies mainly on power generation are estimated at 5.9 billion dinars, according to a budget report issued by parliament.
The head of parliament’s budgets committee, MP Adnan Abdul Samad, said capital investment accounts for just 10 per cent of the latest budget.
The OPEC member has projected a deficit in each of the past 14 fiscal years but ended each year in the black, accumulating more than $300 billion in budget surpluses.
Oil income in 2014/2015 is projected at 18.8 billion dinars, or 94 per cent of total revenue.
Oil revenues were calculated on the basis of a price of $75 a barrel, up $5 from the past year, and a daily output of 2.7 million barrels, according to the report.
Like the previous 14 fiscal years, oil revenues are expected to be much higher than the estimates because the actual price is above $100 a barrel and Kuwait’s daily crude production is running at around 3.0 million barrels.
The emirate’s fiscal year runs from April 1 to March 31.
Actual figures for the past fiscal year ending March 31 have not yet been released but in the previous 2012/2013 fiscal year, the emirate posted a surplus of 12.7 billion dinars.
Revenues came in at a record 32.0 billion dinars and spending was 19.3 billion dinars.
Thanks to higher than expected income driven by firm oil prices, Kuwait decided for the second year in a row to transfer 25 per cent of revenues into its sovereign wealth fund, the assets of which are currently estimated at over $500 billion.
Kuwait has a native population of 1.25 million and is home to 2.7 million foreigners.