Higher than expected oil revenue sees surplus increase in first three months of fiscal year
Kuwait's budget surplus in the first three months of its 2011-12 fiscal year reached KD5.6 billion ($20.3bn), larger than a year ago on higher than expected oil revenue and lower spending, finance ministry data has showed.
The surplus accounted for 15.2 percent of the OPEC member's gross domestic product, according to Reuters calculations. It stood at KD3.2 billion in the same period a year ago and at 4.2 billion in April-May.
Revenue of the world's sixth-largest oil exporter was KD7.1 billion in April-June, while spending came at KD1.5 billion, below a projected 4.8 billion, the data showed.
Oil revenue reached KD6.8 billion in April-June, accounting for 96 percent of the total. The 2011-12 budget is based on an oil price of $60 per barrel.
Brent crude prices have been floating between $98 and $127 per barrel since the fiscal year started in April.
On Thursday, oil prices fell over $3 per barrel with US futures touching $82.75 per barrel as a combination of signals heightened worries about global economic growth.
Since 2004, Kuwait's budget spending has tripled to a record KD19.4 billion planned for the 2011-12 fiscal year, which started in April, with expenditure on wages rising almost as fast.
Revenue was set at KD13.4 billion in the 2011-12 budget, approved by parliament in June, bringing the projected deficit to 5.99 billion, or 16.2 percent of gross domestic product, according to Reuters calculations.
However, the 2011-12 revenue estimate is very conservative given this year's surge in the price of oil.
Last month, Kuwait's ruler said the misuse of budget surplus, including unproductive spending, has led to structural imbalances in the Gulf Arab economy.
The Gulf Arab country of 3.6 million people has no plans to boost budget spending in the next fiscal year, nor does it expect budget cuts in coming months, its finance minister said this month.
A Reuters poll in June forecast Kuwait's economy would grow 4.4 percent in 2011 and generate a fiscal surplus of 20.2 percent of gross domestic product in 2011-12, the largest among Gulf Arab oil exporters.