KUWAIT CITY, Oct 27: A recent weekly economic report examined the severe impact of fluctuating oil prices on Kuwait’s financial stability, emphasizing that sound financial planning demands consistent budget revenue stability, reports Al-Seyassah daily. In Kuwait, where oil accounts for approximately 90 percent of government revenues, the country has little control over the volatility in oil income within a single fiscal year or over the assurance of sustainability in the near future. The report, issued by Al-Shall, highlighted that in 2024, Kuwait’s oil prices ranged between a peak of $91.4 per barrel on April 5 and a low of $70.9 on October 1. This $20.5 swing shifted the budget outlook from a potential surplus of KWD 462.3 million to a possible deficit of KWD 5.4 billion.

By October 23, the average price of Kuwaiti oil settled at $82.3 per barrel. Kuwait also faced a reduction of around 135,000 barrels per day due to OPEC+ production quotas, further impacting revenue. The report noted that, aside from a brief period in April, Kuwaiti oil prices consistently fell below the $89.8 breakeven point needed to balance the national budget. This dependency on oil revenue, along with decreased production, has positioned Kuwait as the only Gulf Cooperation Council (GCC) economy expected to post negative growth of -2.7 percent for 2024. This heavy reliance on oil revenues and Kuwait’s vulnerability to price shocks, the report argued, leaves the nation in need of a “financial magician.” Without such intervention, Kuwait faces two undesirable choices: depleting its savings or falling into global debt as it did in 2017. The report further underscored that while infrastructure concerns such as roads and agriculture are significant, Kuwait’s primary challenge is its lack of a sustainable vision for stability. It suggested abandoning the slogan “Kuwait 2035” or “New Kuwait,” noting that these goals have become more elusive than when they were first proposed.