Government spending on salaries in Kuwait has surged by approximately 3 billion dinars over the past seven years. This reflects a growth rate of 29.2%. As a result, total salary expenditure in the draft budget for the upcoming fiscal year 2025-2026 has exceeded 15 billion dinars. This is a substantial rise from 11.9 billion dinars recorded in the 2019-2020 fiscal year.
Recent statistics show that the number of employees in the public sector has reached approximately 483,200. Kuwaiti citizens make up about 77% of the workforce, totaling 372,800. The number of expatriate employees stands at around 110,400. The government sector remains the most sought-after employment sector for citizens. This is largely due to its attractive benefits, which the private sector struggles to match. This poses a significant challenge for policymakers aiming to shift citizens’ employment preferences toward the private sector.
In terms of the new fiscal year’s budget, the draft budget estimates indicate a 1.6% increase in salaries and related expenses. Total estimated expenditures for this item will reach approximately 15.05 billion dinars. This is compared to 14.8 billion dinars in the current year’s budget. Despite a 9% growth in non-oil expenditures to nearly 3 billion dinars, the budget is expected to face a financial deficit of around 6.3 billion dinars. This is primarily due to declining oil revenues. To balance the budget, oil prices would need to exceed $90.5 per barrel. Capital expenditures, however, are set to account for 9.1% of total expenditures. An allocation of 2.24 billion dinars reflects a slight decrease of 1.7%.
In addition to salary increases, subsidy expenditures have also risen by approximately 18.8% over the past seven years. The total subsidy allocation in the draft budget for 2025-2026 is set at around 4.4 billion dinars. This is up from 3.7 billion dinars in the 2019-2020 fiscal year. Despite a decline in oil prices, which lowered the cost of subsidies—particularly fuel and gas subsidies—the overall subsidy expenditure has not decreased significantly.
As salary and subsidy expenses continue to grow, specialized bodies are exploring ways to address this rise. This trend has led to a shift toward higher current expenditures at the expense of capital and investment spending. To address this, budget officials are considering increasing non-oil revenues by reassessing government fees and service charges.
A recent decree mandates that relevant authorities review and adjust fees for public facilities and services. Adjustments should be based on actual service costs and usage, while ensuring fairness and maintaining a minimum standard of living for all citizens. This approach aims to ensure financial sustainability while balancing efficient public service management and social justice.
