Kuwait’s economy is not that huge, but it is a wealthy petroleum-based economy. According to a study carried by the World Bank, Kuwait is considered the 4th most prosperous country per capita globally. The wealth of Kuwait is contributed mostly by oil, which contributes to about half of the country’s GDP. In fact, Kuwait is one of the top producers of oil, which is around 10% of the world’s crude reserves.
Most of the country’s growth is attributed to oil revenues. Kuwait’s economy has stabilized the country, making it emerge as one of the most promising in the gulf region. Such stability has KGL Investment to run its business activities in the country. Year on Year Beltone Financial Holding expected Kuwait oil revenue to grow by around 17%.
Asharq Al – Awsat (Cairo)
The expectation for the oil revenue growth projects a recording of KWD18.1 billion, which is equivalent to ($60 billion) in the fiscal year 2020 to 2021, going up to 40% from the government estimates. Asharq Al-Awsat recently obtained a report that the company endorsed the expected growth to rise in oil prices which ranges almost $69 per barrel when compared to an average of $64.98 per barrel in the financial year of 2019 to 2020, plus it is higher than the price the government had anticipated at $55 per barrel.
The total revenue Belton expects to be collected around KWD20 billion ($69 Billion) in the year 2020 to the year 2021 financial year. On the other hand, the government is expecting an increase of about 6 billion Kuwait dinars, which is equivalent to ($20 billion)
According to reports from a local media is that the government is planning to postpone the idea of imposing VAT until the year 2021, but the company had not expected budget revenues that reflected such a decision. When Beltone was doing revenue calculations, they considered the imposition of selective taxes by Q4 2020 to 2021, which the parliament is yet to approve.
The implementation of the VAT was expected to have been postponed until the year 2022 to 2023. This was to test the relationship between the newly appointed team of cabinet members and the next members of parliament. The government approved the 2020 to 2021 budget (ending in March), expecting around KWD9.2 billion ($28 billion) deficit as compared to the KWD8.3 billion (25 billion) target deficit in the year 2019 to 2020.
After the transfer of 10% of Kuwait Future Generations Fund (FGF) total revenue is when the budget was later announced, according to the Ministry of Finance.
The government is expected to spend KWD22.5 billion in 2020 to 2021 financial year, which is the same as the current year’s budget estimate, with anticipations that the total revenue will amount to KWD14.8 billion, less than KWD15.8 billion in 2019 to 2020 financial year. According to the report, this is a result of expected crude oil revenues, which are estimated to be around KWD12.9 billion less than the estimation of this year’s KWD13.9 billion.
Amid all these expectations, Kuwait plans to adopt a low dependence on oil and diversify in other areas that are unutilized. The country focuses on investing in other sectors as the oil market is not always stable and too much reliance may hinder the realization of other beneficial ventures that may benefit its citizens.