Kuwait budget surplus on high oil income

Kuwait's provisional budget surplus surged 43 percent to 14.7 billion dinars ($52.2 billion) in the first seven months of the fiscal year, boosted by oil income, government data showed on Monday. The figure compares with a 7.3 billion dinar ($26.0 billion) deficit projected in the budget for 2012-2013, which began on April 1. The surplus stood at $36.5 billion in the same period last fiscal year. In the 2011-2012 fiscal year that ended on March 31, the OPEC member posted a record budget surplus of $47 billion on the back of an all-time high income of $107.5 billion. Oil income makes up about 95 percent of public revenues. Revenues until the end of October also rose 15.7 percent to 18.86 billion dinars compared with the same period in the last fiscal year. The seven-month income is also up 35.3 percent on budget estimates for the whole year of 13.9 billion dinars, according to the figures posted on the finance ministry website. Income from oil jumped 40.9 percent over the same period last year to 18.0 billion dinars. Meanwhile, spending shrank by a massive 30.7 percent to 4.2 billion dinars from last fiscal year's 6.0 billion dinars in the first seven months. The ministry did not give reasons for the sharp drop but it is believed an ongoing political crisis in the Gulf state has further slowed down projects. Kuwait's government issued the 2012-2013 budget with record spending projections of 21.2 billion dinars in the absence of a parliament. The new assembly is expected to confirm the budget soon. National Bank of Kuwait said in a recent report that the country was expected to post a surplus of between $34.8 billion and $45.4 billion at the end of the current fiscal year. The projections were based on an average oil price of between $104 and $107 a barrel for Kuwaiti crude, said the central bank. Kuwait has projected a deficit in each of the past 13 fiscal years, but ended in surplus mainly by calculating oil income at a very low price. During that period, the emirate has accumulated about $250 billion in budget surpluses. Under Kuwaiti law, 10 percent of revenues are deducted every year in favour of the emirate's sovereign wealth fund, the assets of which are estimated at about $400 billion. This fiscal year, Kuwait decided to transfer 25 percent of revenues into the sovereign wealth fund. Returns on the fund are not included in the budget. With a native population of 1.2 million in addition to 2.6 million foreigners, Kuwait says it holds 10 percent of global crude oil reserves and pumps about 3.0 million barrels of oil per day.