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JEDDAH: Kuwait’s government projected its budget deficit to rise by 11.9 percent to 6.31 billion Kuwaiti dinars ($20.4 billion) for the fiscal year 2025-2026, up from the 5.6 billion dinars shortfall estimated for the current fiscal period. 

The Cabinet approved the draft budget on Feb. 2 for the upcoming fiscal year, which will be submitted for final approval by the Emir, Sheikh Meshal Al-Ahmed Al-Sabah. 

In a brief statement following an extraordinary meeting, the Cabinet noted that the government expects revenues to total 18.2 billion dinars, a decrease from the 18.9 billion dinars forecast for 2024-2025. Expenditures are projected at 24.5 billion dinars, slightly lower than the 24.6 billion dinars allocated for the current year. 

This comes amid growing economic challenges in Kuwait, with a recent report from the International Monetary Fund forecasting a 2.8 percent contraction in 2024, followed by a recovery in 2025. The IMF highlighted risks related to oil dependence and delays in reforms, though it also noted signs of recovery in the non-oil sector despite a contraction in the oil sector.

Despite the projected deficit for the full fiscal year, Kuwait posted a budget surplus of 150.4 million dinars in the first half of 2024-25, according to Finance Ministry figures released in November. The surplus was attributed to higher revenues and reduced spending. 

The draft budget for the period from April 1, 2025, to March 31, 2026, includes projected oil revenues of 15.3 billion dinars, reflecting a 5.7 percent decline from the current budget. Non-oil revenues are expected to rise by 9 percent, reaching 2.92 billion dinars, as stated by Minister of Finance and Minister of State for Economic and Investment Affairs Noura Al-Fassam. 

The finance minister stated that total estimated revenues decreased by 3.6 percent, with oil revenues, estimated at 15.3 billion dinars, falling by 5.7 percent for the current budget ending on Mar. 31, 2025. 

She added that wages and subsidies are expected to account for 79.5 percent of total spending, with capital expenditures estimated at just 9.1 percent. Additionally, non-oil revenues are projected at 2.92 billion dinars, reflecting a 9 percent increase from the current budget. 

The finance minister noted that the government is budgeting for an oil price of $68 per barrel for the upcoming fiscal year, although the breakeven price needed to cover the fiscal deficit is pegged at $90.5 per barrel. 

RIYADH: Saudi Arabia’s insurance sector is set to see improved supervision and enhanced growth prospects following a new agreement between the Kingdom’s Capital Market Authority and the Insurance Authority. 

The memorandum of cooperation aims to strengthen oversight for insurance firms listed on the Saudi financial market, while also fostering greater stability and growth within the sector, the Saudi Press Agency reported. 

This aligns with the expected growth of Saudi Arabia’s insurance market, which is projected to reach a gross written premium of $19.27 billion this year, according to German data gathering platform Statista. 

While the US is expected to generate the highest gross written premium at $3.93 trillion, Saudi Arabia’s market is witnessing rapid growth, driven by economic development and increasing awareness of the need for insurance protection. 

The newly signed memorandum aims to ensure role integration and consistency between the two authorities, supporting the Kingdom’s Vision 2030 goals of developing the financial sector to meet its economic and developmental objectives. 

A recent KPMG report revealed a 16.9 percent year-on-year revenue growth in Saudi Arabia’s insurance sector for the third quarter of 2024, driven by increases in motor, property, and medical insurance. It attributed the growth to ongoing economic reforms under Vision 2030, highlighting regulatory measures that have strengthened the sector’s development and stability. 

Medical insurance was a key driver of overall growth, with revenues rising by 13.6 percent, largely due to the government’s implementation of mandatory health coverage regulations, according to the analysis. 

Motor insurance also saw a significant boost, with revenues up 22.7 percent year on year, the report said. 

The analysis added this growth was tied to an expanding auto market and regulatory measures ensuring compliance with insurance requirements. 

The property and casualty insurance segment also experienced strong growth, with a 20.4 percent increase in revenues, reflecting the ongoing expansion of infrastructure and real estate projects across Saudi Arabia. 

The growth comes as the Kingdom’s regulatory body is working to improve the sector’s efficiency and stability while supporting local infrastructure and fostering a thriving business ecosystem, the analysis said.