OPEC producer Kuwait is expected to cut spending on projects and associated sectors by nearly 7.7 percent in fiscal year 2024-2025 as part of overall reduction in public expenditure, according to the National Bank of Kuwait.

The Gulf country also expects lower revenues in the next fiscal year, which starts on 1 April as a result of a projected decline in oil export earnings, NBK said in a study.

Capital spending is forecast to shrink by 7.7 percent to around 2.3 billion Kuwaiti dinars ($7.6 billion) in 2024-2025 while subsidies will be slashed by 22 percent and wage allocations by 0.8 percent, NBK said in the study on Monday.

The reduction in capital spending is for the third successive year and reflects a government tendency to rationalize expenditure to control the budget deficit, it said.

The study, citing the 2024-2025 draft budget prepared by the Finance Ministry, estimated the deficit at KWD5.9 billion ($19.5 billion).

Expenditure is projected to decline by 6.6 percent at KWD24.6 billion ($81.2 billion) and revenues by 4.1 percent to KWD18.7 billion ($61.7 billion) as a result of an expected drop in oil revenues by 5.4 percent to around KWD16.2 billion ($53.46 billion), NBK said.

(Writing by Nadim Kawach; Editing by Anoop Menon)

(anoop.menon@lseg.com)

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