KUWAIT — The interim public finance figures for the first eight months of fiscal year 2015/16 (FY15/16) point to a decline in government spending, as the price of oil fell to a seven-year low, the National Bank of Kuwait (NBK) report said.
However, despite the decline in overall spending, wages & salaries and capital spending still rose. The latter continued to reflect an accelerated pace of project execution. Meanwhile, nonoil revenues remained well below their 5-year average, it said.
The government recorded a preliminary deficit of KD 1.9 billion during the period before the transfer to the Reserve Fund for Future Generations (RFFG). We estimate FY15/16 will close with a deficit of KD 3.9 billion or 9.8% of GDP.
As of November, reported government spending stood at KD 6.6 billion fiscal-year-to-date (fytd); this figure was 22% lower than during the same period last year. However, at 35% of the FY15/16 budget, the spending rate is slightly lower than the five-year November average of 37%.
Actual spending was even higher at KD 11.2 billion according to new data being published by the Ministry of Finance on actual withdrawals made from the government accounts at the Central Bank of Kuwait. This accounting difference is related to delays in reporting expenditures by some ministries, it said. Also, the government has payments due of KD 1.14 billion to the Ministry of Electricity and Water (MEW) and the Public Institute for Social Security (PIFSS).
Current spending, the bulk of total spending, came in at KD 5.8 billion fytd, down 25% y/y. The decline in current spending was driven mainly by the 'miscellaneous expenditures & transfers' chapter. — SG
