Kuwait booked a record budget surplus of 13.2 billion dinars ($47 billion) in the fiscal year that ended in March thanks to robust oil income and lower spending than planned, a consultancy said Sunday, citing preliminary figures from the Finance Ministry.
The fiscal surplus of the major oil exporter reached 27.1 percent of 2011 gross domestic product, according to a Reuters calculation based on an April GDP estimate by the International Monetary Fund.
That is well up from 5.3 billion dinars, or 14.8 percent of 2010 GDP in 2010/11. A Reuters poll in July forecast the surplus to reach 22.3 percent of GDP in the current fiscal year.
The finance ministry was not immediately able to confirm the budget figures when contacted by Reuters.
Kuwait originally set its 2011/12 budget with a deficit of 6 billion dinars based on an assumed oil price of $60 per barrel.
Spending stood at 17.0 billion dinars in 2011/12, a note by Al-Shall Consulting said, 2.4 billion dinars short of what was planned but above 16.2 billion spent in the previous fiscal year. The OPEC member usually undershoots its expenditure plans.
Revenues were 30.2 billion dinars with oil income making up nearly 95 percent of the total, the report stated. That is more than double what was originallyenvisaged in the budget and the highest income ever, central bank data shows.
Despite its healthy fiscal position, Kuwait is struggling to diversify its economy, which is heavily reliant on oil, as a long-running political row holds up investment.
Kuwait’s parliament failed to swear in a new Cabinet last week after lawmakers boycotted the session, making the dissolution of the assembly likely and throwing the country into more political upheaval.
The parliament, which will attempt to meet again Tuesday, has yet to approve the budget for 2012/13, although the fiscal year started in April.
Kuwait’s emir reappointed Nayef al-Hajraf as finance minister last month. He took over in May after the resignation of ministry veteran Mustapha al-Shamali, who had voiced concerns about the country’s dependency on oil revenues.
Analysts and policymakers say Kuwait’s wealth has led to complacency. The IMF said in May that the Gulf Arab state risks exhausting all of its oil savings by 2017 if it keeps on spending money at the current rate.
It said Kuwait, one of the world’s richest countries per capita, would have to cut the fiscal deficit excluding oil and debt servicing by at least 7 billion dinars by 2017 to ensure long-term fiscal sustainability.