Kuwait's government posted a budget deficit of KD 4.6 billion for the fiscal year 2015/16 for the first time in 17 years, according to a report by the National Bank of Kuwait (NBK) carried by KUNA news agency on Wednesday.

The deficit, before the transfer to the Future Generations Fund (FGF), reached 13.4 percent of GDP and it compares to an average of budget surplus of 21 percent of GDP recorded during the previous five years.

The large deficit is the result of a sharp decline in oil prices, as the Kuwaiti government remains committed to its development plan projects, the report, said, forecasting a similar deficit of 13 percent of GDP for the fiscal year 2016/17 as low oil prices prevail.

The government saw revenues decline for the second consecutive year largely on lower oil prices. Revenues, at KD 13.6 billion, were down by 45 percent in the fiscal year 2015/16. The price of Kuwaiti crude averaged 43 per barrel in FY15/16, 47 percent lower than the year before. During the same period, oil production saw a small increase of 1.5 percent to average 2.9 million barrels per day. As a result, oil revenues dropped by 46 percent to KD 12.1 billion or 35 percent of GDP, the lowest ratio in a decade.

Nonoil revenues were also notably down by 38 percent in the fiscal year 2015/16, the report added. 

Source : QNA