Kuwait 6-Month Budget Surplus At $31bn, Spending Behind Plan

Kuwait’s government budget surplus reached 8.97 billion dinars ($30.84 billion) in the first six months of this fiscal year as expenditure remained well below the initial plan, preliminary finance ministry figures showed on Wednesday.

The major oil exporter’s public spending was 6.12 billion dinars in April-September, below 11.61 billion dinars originally planned for the period. It was equivalent to only 26 per cent of the 23.21 billion dinar spending plan for the 2014/15 fiscal year.

Kuwait’s expenditure has fallen behind its budget plans repeatedly in recent years as political disputes and bureaucracy have delayed budget approvals in parliament as well as the implementation of much-needed investment programmes.

State revenue was 15.09 billion dinars in April-September, well above the 10.03 billion dinars originally projected for the period. Oil income stood at 14.20 billion dinars.

Kuwait has one of the strongest fiscal positions among the Gulf oil exporters; it needs a crude oil price of just $54 per barrel for its state budget to break even, according to the International Monetary Fund.

But its heavy dependence on oil income makes its economy more vulnerable to lower crude oil prices and output. Benchmark Brent crude touched $80.46 per barrel this week, its lowest level since September 2010; however, the average so far this calendar year is $104.20.

Analysts polled by Reuters in September forecast Kuwait’s fiscal surplus at a robust 22.2 per cent of gross domestic product in the current fiscal year and 17.8 per cent in 2015/16.