Kuwait budget surplus falls 59%

Kuwait's budget surplus for 2008/09 stood at KD2.7 billion ($9.4bn), down 59 percent from KD6.6 billion in the previous year, according to a new report from the National Bank of Kuwait (NBK) on Tuesday.

NBK's report said that extraordinary transfers to the Public Institution for Social Security (PIFSS) which amounted to KD5.5 billion along with the high cost of fuel incurred by the Ministry of Electricity and Water (MEW) were the drivers behind an 88 percent rise in total spending.

Excluding the special PIFSS transfer, the latest surplus would have been KD8.3 billion, NBK added.

It said that government revenues stood at KD21 billion, up 10 percent from the previous fiscal year, and 66 percent above the government's own budget projection.

Oil revenues rose only 11.2 percent on the back of slightly higher oil prices but they were negatively affected by cuts in OPEC crude production during the past fiscal year.

In contrast, NBK noted that non-oil revenues witnessed a small drop of 0.6 percent to reach KD1.3 billion.

Fees related to land sales were down by KD10.4 million (84 percent), reflecting the slump in real estate activity.

The NBK report said the budget for the current fiscal year 2009/2010 projects a KD4 billion deficit, including a 36 percent drop in both revenues and expenditures from previous budget figures.

Oil revenues are expected to shrink by 41 percent on the back of lower oil prices, while non-oil revenues are projected to rise by 12 percent.

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