Kuwait 9-month budget surplus widens to $25bn
Kuwait, January 20, 2011
Kuwait's budget surplus widened to KD7.03 billion ($25.09 billion) in the first nine months of the 2010/11 fiscal year on higher-than-forecast oil revenues and lower spending, official data showed on Thursday.
Revenue in the world's fourth-largest oil exporter recorded a 17 per cent jump to KD15.13 billion at the end of December from a year ago, data on the finance ministry website showed. The fiscal year in Kuwait starts in April.
The OPEC member's oil revenue accounted for 93 per cent of income, while spending in the first nine months reached KD8.09 billion, 46 per cent of the full year plan.
The surplus reached KD6.04 billion in the first eight months of the same fiscal year.
The Gulf state's 2010/11 budget forecast a deficit of KD6.58 billion, assuming its crude would fetch $43 a barrel.
Analysts have said Kuwait is likely to register the biggest budget surplus in the Gulf Arab region by the financial year-end as the oil price estimate on which it is based is well below current market prices.
Benchmark US crude was trading at about $90.5 a barrel on Thursday.
Analysts polled by Reuters expected a fiscal surplus of 18.9 per cent of gross domestic product for the current fiscal year.
Earlier this week, Kuwait's emir granted each Kuwaiti citizen KD1000 and free food rations until March 2012, as the Gulf Arab state marks 50 years of independence, and five years since Sheikh Sabah al-Ahmad al-Sabah became the emir. The grant is worth about KD1.36 billion.
Analysts said that country's economy can easily withstand the grant, but surplus for the fiscal year could drop.
'The budget can easily withstand this amount of additional spending. We expect the 12th consecutive budget surplus this fiscal year 2010/11 at KD5 billion. The expected surplus would thus fall to about KD3.9 billion,' said Elias Bikhazi, head of economic research at National Bank of Kuwait. – Reuters