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RIYADH: Kuwait recorded an actual budget deficit of 1.06 billion dinars ($3.46 billion) for the 2024-2025 fiscal year ending March 31, significantly lower than the projected shortfall of 5.6 billion dinars.

According to Reuters, citing data published in the official gazette Kuwait Al-Youm, total actual revenues reached 22.06 billion dinars, surpassing the estimated 18.9 billion dinars. Of the total, 19.36 billion dinars were derived from oil income.

This comes as government spending came in at 23.11 billion dinars, lower than the 24.5 billion dinars initially forecast in the state budget plan.

Economic researcher Mohammed Ramadan said the lower-than-expected deficit was “normal,” attributing it to Kuwait’s conservative approach to budgeting, Reuters reported.

“The government usually underestimates revenues and overstates expenditures, which makes the projected deficit appear somewhat exaggerated,” he said.

“Unfortunately, this policy leads the government to spend less than it should, which in turn reduces investment in development projects that grow more expensive over time due to inflation and other factors,” he added.

Total expenditures declined by nearly seven percent compared to the previous fiscal year, when spending stood at 23.64 billion dinars.

Ramadan said the decrease was primarily due to reduced allocations for grants. 

These typically include support for foreign countries, international organizations, and some domestic institutions.

He also noted a reduction in the goods and services category, which encompasses a wide range of operational spending. 

“This indicates a broad reduction in government spending across many items in this category,” he said.

In February, the government approved the draft budget for 2025-2026, projecting the deficit to widen by 11.9 percent to 6.31 billion dinars.

The draft, which still requires final approval by Emir Sheikh Meshal Al-Ahmed Al-Sabah, expects revenues to drop to 18.2 billion dinars, while expenditures are set at 24.5 billion dinars.

Kuwait’s economy saw a 3 percent contraction in 2024 according to official data published in May, which also showed the contribution of non-oil sectors to GDP increased by 3.7 percent during the 12-month period.

Despite the forecasted full-year deficit, Kuwait posted a surplus of 150.4 million dinars during the first half of the 2024-2025 fiscal year, according to Ministry of Finance data published in November. The surplus was driven by higher revenues and reduced spending.

JEDDAH: Entertainment focused small and medium enterprises in ������Ƶ experienced a 98 percent year-on-year increase in financing during the second quarter of 2025. 

The Small and Medium Enterprises Financing Guarantee Program, also known as Kafalah, supported 32 establishments and issued guarantees exceeding SR79 million ($21 million), the Saudi Press Agency reported. 

The number of beneficiary establishments rose 78 percent compared with the same period in 2024. By the end of the quarter, 94 enterprises had benefited from the program’s entertainment sector product, receiving total financing of more than SR304 million and guarantees totaling SR225 million.

Kafalah works in partnership with the General Entertainment Authority and financial institutions to provide guarantees that reduce financing risks and broaden access to capital. The initiative is part of Saudi Vision 2030’s strategy to foster economic growth and develop promising sectors.  

The SPA report noted that this growth in the entertainment sector highlights “the effectiveness of the product in supporting the sector’s growth and facilitating establishments' access to appropriate financing solutions.” 

It added: “The Kafalah program continues its commitment to supporting vital sectors by providing financial guarantees that contribute to reducing financial risks and expanding the scope of financing through effective partnerships with financing entities, supported by an integrated technical and knowledge system.” 

Kafalah’s Entertainment Product provides financial guarantees to SMEs across various entertainment sectors, including supporting industries, offering coverage of up to 90 percent of the funding value, according to its website.  

Maximum guarantee limits are SR2.5 million for micro enterprises, SR5 million for small enterprises, and SR15 million for medium enterprises. Enterprises can apply directly through cooperating financial institutions or via the SME Bank’s finance portal, with the program reviewing requests and issuing guarantees to the financier upon approval. 

Since its inception in 2020, Kafalah has issued more than 64,000 guarantees valued at SR72.5 billion, supporting over 23,000 enterprises and creating nearly 1 million jobs, according to a release issued in September 2024.  

Twenty-seven enterprises have transitioned from medium-sized firms to the parallel market, while 8 percent of micro-enterprises have grown into small and medium-sized businesses. 

The program also reduced the average processing time for guarantees from 48 working days to just 36 hours using AI-driven systems. Studies conducted with King Fahd University of Petroleum and Minerals found that Kafalah-supported enterprises experienced a 17.3 percent increase in employment compared with those relying on traditional financing. 

Over the past five years, the Kafalah program has contributed nearly SR27 billion to ������Ƶ’s gross domestic product, highlighting its role in expanding the Kingdom’s SME ecosystem.