KUWAIT CITY, Oct 27: A recent weekly economic report examined the serious impact of oil price fluctuations on Kuwait’s financial stability, emphasizing that good financial planning requires constant stability of budget revenues, reports Al-Daily. Seyassah. In Kuwait, where oil accounts for about 90 percent of government revenue, the country has little control over the volatility of oil revenues in a single financial year or ensuring sustainability in the near future. The report, published by Al-Shall, highlights 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 change changed the fiscal outlook for a potential KWD surplus. 462.3 million to a possible deficit of KWD 5.4 billion.

On October 23, the average price of Kuwaiti oil stood at $82.3 per barrel. Kuwait also faced a reduction of around 135,000 barrels per day due to OPEC+ production quotas, further impacting its revenues. The report notes that, apart from a brief period in April, Kuwaiti oil prices have consistently fallen below the break-even point of $89.8 needed to balance the national budget. This reliance on oil revenues, along with a decline in production, has made Kuwait the only Gulf Cooperation Council (GCC) economy expected to post negative growth of -2.7% for 2024. This heavy dependence on oil revenues and Kuwait’s vulnerability to price shocks, the report says, the nation needs a “financial magician.” Without such intervention, Kuwait faces two undesirable choices: exhaust its savings or sink into global debt as was the case in 2017. The report further highlights that even if infrastructure problems such as roads and agriculture are important, Kuwait’s main challenge is its lack of sustainable vision. for stability. He suggests abandoning the slogan “Kuwait 2035” or “New Kuwait,” pointing out that these goals have become more elusive than when they were first proposed.