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Kuwait is maintaining spending in the budget for the year beginning 1 April at similar levels to 2015-16, despite oil prices last month hitting 12-year lows.
Revenues are slated to plummet to just KD7.4bn ($24.4bn) for 2016-17, down by 41% in real terms on the budgeted figure for the 2015-16 financial year. The budget deficit is therefore set to rise by almost 50% to KD12.2bn ($40.2bn).
However, unlike other GCC countries’ budgeted oil price assumptions, Kuwait’s at $25/B appears overly pessimistic, so the actual deficit will likely be smaller. The budget also has provisions for subsidy cuts as Kuwait prepares to emulate its fellow Gulf Cooperation Council (GCC) states (see box p13).
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