The public budget in Kuwait recorded a deficit of 2.262 billion dinars (about 7.5 billion dollars) during the first 10 months of the fiscal year 2019-2020, compared to a surplus of 1.59 billion dinars (5.2 billion dollars) for the same period in the previous fiscal year, an increase of 242%, after deducting the share of future generations.
The state’s general budget recorded a deficit before the deduction of the share for the period from April 1, 2019, to January 31, 2020, amounting to 833.32 million dinars, compared to a surplus of 3.294 billion dinars over the corresponding period of last fiscal year, according to Kuwaiti media.
The share of future generations reserve was about 1.429 billion dinars, compared to 1.7 billion that were deducted from the corresponding period.
The total revenue decreased by 2.719 billion dinars to 14.29 billion, or 16%, compared to 17.01 billion for the same period in the 2018-2019 fiscal year.
As oil revenues of 13.065 billion dinars were collected, non-oil revenues of 1.227 billion, taxes and fees of 440.45 million dinars, and social contributions of 75.449 million.
Moody’s: Kuwait‘s wealth and reserves support Aa2
Moody’s confirmed Kuwait’s credit rating of Aa2, noting that exceptional levels of high wealth and large oil reserves support this credit situation.
The agency said in a summary of the periodic review of Kuwait‘s sovereign rating, on Wednesday, that this classification comes supported by the strength of the country’s economy at the level of (a2).
She pointed out that the institutional classification and governance strength in Kuwait at (baa2) level, supported by the framework of reliable monetary policy led by the Central Bank of Kuwait, and strong supervision of the banking system.
The agency indicated that this classification indicates the balance achieved by the country against the deterioration in some aspects of the institutional framework and the effectiveness of the government due to the inability to implement the planned financial and economic reforms.
She pointed out that the classification of Kuwait‘s financial strength at (aaa) level is supported by the low levels of government debt, in addition to the assets of huge sovereign wealth funds accumulated from large financial surpluses before 2015.
Moody’s pointed out that the classification of Kuwait‘s vulnerability to juvenile risk at the level of (ba) reflects its exposure to regional geopolitical risks and the high level of dependence on the Strait of Hormuz, which is offset by a relatively neutral position in foreign policy.
The country with the highest oil dependence
Although Kuwait has the lowest equilibrium rate for external oil prices in the Gulf Cooperation Council states, in addition to exceptionally large government financial assets, it is a member of the Gulf Cooperation Council, the highest dependent on oil, according to the measurement of government exports and revenues.
And previously the agency said, that Kuwait is the slowest in terms of economic diversification and implementation of financial reforms, at the level of the six Gulf states.
Kuwait still has to apply the 5% value-added tax, agreed in principle among the Gulf Cooperation Council countries, according to Moody’s.