Kuwait approved its 2025-26 budget with a bigger deficit. The country expects lower oil income, making it harder to balance spending and revenue. The new budget starts on April 1 and sets spending at KD24.5 billion ($80.8 billion).
Kuwait’s budget deficit grows as oil prices drop. The country now expects a shortfall of KD6.3 billion, higher than this year’s KD5.6 billion. The government relies heavily on oil sales, but earnings from Kuwait Petroleum Corporation (KPC) will be lower next year. Officials predict KD23.06 billion in oil revenue, nearly KD2 billion less than in the current budget.
KPC sends most of its income to the state. A part of this money also goes to the Future Generations Fund. This fund helps secure Kuwait’s financial future by saving a portion of oil profits.
Kuwait’s budget deficit grows as non-oil revenue rises. The government expects non-oil earnings to increase by 9% to KD2.9 billion. This is a positive sign, as non-oil income was only KD2.68 billion in 2024-25. Officials believe this increase will come mainly from higher tax collections.
The finance ministry plans to introduce a 15% tax on multinational companies. This new tax is expected to generate KD250 million. Finance Minister Noora Al-Fassam says the tax will help reduce reliance on oil and improve state revenue.
Kuwait’s budget deficit grows as spending remains high. The country faces challenges balancing its expenses with revenue. With oil prices uncertain, the government looks for new ways to support the economy. Officials hope higher tax earnings and economic reforms will help close the gap in future budgets
