Kuwait 9-month budget surplus down to $50bn
Kuwait, February 9, 2014
Kuwait's budget surplus narrowed by 11 per cent in the first nine months of its fiscal year as spending rose and oil revenues dipped slightly, provisional figures from the finance ministry showed on Sunday.
The trend in spending and revenue numbers are in line with a warning from the International Monetary Fund that Kuwait's expenditure could exceed oil revenues as early as 2017/18 if the government does not control spending growth.
The budget surplus for April to December was 14.34 billion Kuwaiti dinars ($50.73 billion) compared to 16.10 billion dinars in the same period a year earlier a Reuters calculation based on official data showed.
The country has a strong fiscal position because of its oil income but economists say it needs to control public wage growth and other non-investment spending in order to maintain a budget surplus into the next decade.
In October, the Prime Minister described the country's welfare system as unsustainable. Kuwait, which relies on oil for more than 90 percent of its income, provides a generous welfare system for its citizens.
Senior government officials have been talking more frequently about the risk to the country's budget surplus, but it is unclear whether the cabinet will be able to push through unpopular economic reforms such as reducing subsidies or halting wage growth.
In recent quarters, the trend has been for the state to increase spending on things such as wages rather than investing in infrastructure.
Nine-month state expenditure reached 9.64 billion dinars, up 18 percent from 8.16 billion dinars a year earlier, the figures showed.
Revenues, which are vulnerable to the oil price, fell slightly to 23.98 billion dinars from 24.26 billion dinars.
Kuwait pledged $4 billion in aid to Egypt after the overthrow of Islamist Egyptian President Mohamed Mursi in July, and quickly began disbursing that aid. It was not clear whether the latest data reflected that cost. - Reuters