Strong oil prices boosted Kuwait’s actual revenue by a whopping 159 per cent above budgeted levels and this will allow the Gulf emirate to record another large surplus of around KD9-10 billion in fiscal year 2011-2012.
According to a key Kuwait bank, actual expenditure grew by a meager two per cent but it is expected to pick up in the remaining months of the fiscal year.
National Bank of Kuwait (NBK), citing government data, said public spending stood at around KD8.3 billion (DH108 billion) in the first nine months of fiscal 2011-2012, which began on April 1 last year.
Total revenues reached KD 21.4 billion (Dh278 billion), up 42 per cent year on year, mainly due to higher oil prices, it said in its latest report.
Three quarters into the fiscal year, revenues are already at 159 per cent of the full year budget, the report showed.
It said the conservative oil price assumption of $60 a barrel compared to an actual average of nearly $107 for the nine-month period is behind the discrepancy between budgeted and actual revenues.
“So far, Kuwait’s budget reveals a massive surplus of KD 13.1 billion (DH170 billion). We forecast a KD 9-10 billion surplus for the entire fiscal year, as spending typically accelerates later in the year.”
The report showed Kuwait has spent nearly 43 per cent of its full year budget in the first nine months of the fiscal year, slightly below its 5-year average for comparable periods. Both actual spending and reporting usually pick up in the last fiscal quarter, the report said.
The report noted that Kuwait export crude averaged around $107 a barrel in the first nine of fiscal year 2011-2012 compared to an average of $83 during the same period of fiscal 2010-2011.
Kuwait, a key OPEC oil producer, has recorded massive fiscal and current account surpluses over the past few years because of high crude prices.