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The paper investigates and analyses the government budget deficit in both Kuwait and Egypt, and examines the causes leading to it in both countries . the findings show that the  budget deficit in Kuwait is mainly the result of the deterioration of the largely oil – dependent government revenues. One farther causes of budget deficit in Kuwait is the way the budget is designed, whereby some items are included and others are missing on arbitrary  basis . additionally , capital budgetary deficit is another sources of government deficit in both Kuwait and Egypt . to finance the deficit , the government in Kuwait had to draw on its general reverses . this resulted in erosion of the countries overseas investments. As a further remedial measure, the government has also borrowed from the domestic financial market, starting November 1987. the analyses illustrated the problem resulting from the dependence of Kuwait on oil revenues  as a unique source of income, which makes it vulnerable to external markets conditions.