Kuwait trade surplus narrows on lower oil exports
Kuwait, October 28, 2013
Kuwait's trade surplus narrowed to KD5.9 billion ($21 billion) in the first quarter, around KD1.1 billion below the all-time high recorded a year ago due to a combination of lower export receipts and rising imports, said a report.
This was about KD0.4 billion lower than the previous quarter. Nevertheless, at 12 per cent of forecast (whole year) 2013 GDP, the surplus remains extremely large by international standards, stated the National Bank of Kuwait in its review.
For the year as a whole, the goods surplus could end up at close to 50 per cent of GDP, just below last year's, the country's top lender said.
NBK pointed out that the oil export receipts were down by 13 per cent year-on-year to KD7.4 billion in the first quarter of 2013 – their lowest level in over a year. This was driven by a seven per cent year-on-year decline in Kuwait Export Crude (KEC) prices and a six per cent reduction in oil production over the same period.
The oil export revenues are likely to have fallen further in the second quarter as a drop in prices more than offset the impact of production increments. The price of KEC fell by more than $8 per barrel from its first quarter average of $108, the report added.
Similarly, non-oil exports slipped to KD0.4 billion in the first quarter – around 7 per cent lower than the same period in the previous year, said the Kuwaiti lender in its review.
"All components of this category saw a decline, including ethylene products and re-exports. The former is expected to continue to decline in the second quarter in line with a drop in ethylene prices," it added.
Imports, on the other hand, edged up for the second consecutive month to KD1.9 billion, almost reaching the record high seen in the fourth quarter of 2011. But the yearly growth in imports has remained sluggish at around 3 per cent, compared to the 10 per cent average rate seen in 2010 and 2011, the report stated.
However, NBK said, the signs of improvement in the non-oil economy could indicate a faster pick-up in imports going forward.
"With oil prices set to average around $106 per barrel for 2013 and crude production running at close to capacity, Kuwait’s trade surplus should register another strong year. The expected strengthening of imports is unlikely to be large enough to trim the surplus very much," the report added.-TradeArabia News Service