Parliament’s budget committee has opposed a government plan to raise spending by additional 1.8 billion dinars mainly on wage and benefit increases for Kuwaiti citizens, which would have taken the expenditure to 19.7 billion.
In January, Finance Minister Mustapha Al-Shamali said expenditure for the world’s No. 4 oil exporter was expected to come in at 17.9 billion dinars, a 10 percent rise from the 2010/11 budget.
Budget revenue was set at 13.4 billion dinars, unchanged from the government plan announced in January, bringing the OPEC member’s deficit to 5.99 billion, or 16.2 percent of gross domestic product, according to Reuters calculations.
The budget proposal for the fiscal year, which started in April, was supported by 39 votes in a 50-member assembly, while 20 lawmakers opposed it.
The government, which now needs to ratify the budget, can participate in assembly votes.
Kuwait has not seen a budget deficit since at least 2003, central bank data show, as like fellow Gulf oil producers it bases its budget on a conservative oil price estimate, which stands at $60 per barrel for 2011/12.
US benchmark crude prices hovered between $89 and $115 per barrel since April.
Analysts polled by Reuters in June expected Kuwait, which depends on oil for over 90 percent of budget income, to see a fiscal surplus of 20.2 percent of GDP in 2011/12, the highest in the Gulf.
Concerned about regional unrest, Gulf oil exporters have boosted government spending to ease social tensions at home with Saudi Arabia pledging handouts worth estimated $130 billion, or around 30 percent of its GDP.
Already in January, Kuwait announced plans to spend nearly $5 billion, or around 4 percent of its GDP, on cash grants and free food rations.
Inflation in Kuwait is the highest in the Gulf at 5.4 percent year-on-year in May, data showed on Sunday.
