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Kuwait benefits from oil price boom but long-term economic challenges loom

Key reforms and a lack of a diversified economy remain only two of Kuwait's major challenges.
Traders follow the movement of stock prices at the Boursa Kuwait (Kuwait Stock Exchange) in Kuwait City on March 2, 2022.

Kuwait's Ministry of finance announced on Nov. 20 that it had narrowed its budget deficit for the 2021-2022 financial year more than it had initially forecasted, dropping 72.2% year-on-year to 2.99 billion dinars ($9.71 billion). The improvement comes on the back of elevated oil revenues. 

Meanwhile, the newly elected parliament approved on Nov. 1 the country’s delayed budget for the fiscal year 2022-2023. The budget assumes an oil price of $80 per barrel and a break-even point of $80.4. It forecasts that revenues will be 23.4 billion dinars ($76 billion) with 91% deriving from oil. Expenditure is expected to be at 23.5 billion dinars ($76.3 billion), with around 75% of expenditure being directed toward public sector salaries and subsidies.

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