Kuwait’s Oil Exports Fall 3% In 2013

Kuwait’s oil exports declined to KD30.8 billion ($109.5 billion) in 2013, down by three per cent from 2012, according to a report by National Bank of Kuwait (NBK).

The fall in the Gulf state’s oil exports were mainly due to lower oil prices in 2013 as the market eased due to surging non-OPEC supplies and a modest growth in global demand. Kuwait’s export crude prices averaged $105 per barrel last year, down four per cent from its 2012 prices, the report said.

Lower oil exports also pushed down the OPEC member’s trade surplus, which fell to KD24.3 billion last year compared to KD25.7 billion in 2012, according to NBK. The surplus is estimated to be around 48 per cent of Kuwait’s GDP in 2013.

Despite a fall in oil exports, the report found that the Gulf state’s non-oil exports climbed to KD1.9 billion, driven by a rise in exports of ethylene products. Non-oil exports accounted for around six per cent of Kuwait’s total exports in 2013.

The GCC member’s imports also grew steadily- up nine per cent in 2013, reaching an all-time high of KD8.3 billion, the report said.

Within the non-oil sector, imports in Kuwait’s consumer sector grew the fastest among overall imports.

NBK estimated the country’s trade balance will shrink further in 2014 but stated that it will still remain substantial.

Oil exports are expected to decline as market loosens, bringing the price down this year. But it offered a mixed outlook for imports.

“A faster pace of execution of stalled government projects would provide a much-needed boost to the economy, while recent signs point to a slight softening in the consumer sector,” the report said.

“Despite the latter, consumer spending should remain relatively strong, supporting growth in imports.”

According to the state’s central bank governor, Kuwait’s economy is expected to grow between three to 3.5 per cent this year.

High oil prices have helped the Gulf Arab state to build large fiscal buffers till date. But experts have warned Kuwait to cut down its burgeoning public wage bill and to diversify its revenues to keep posting budget surpluses.

The OPEC member’s public spending rose eight per cent during the first 10 months of this fiscal year compared to the corresponding period last year, government data showed.