Kuwait posts record $47 bn budget surplus

OPEC member Kuwait has posted record budget surplus and revenues in the 2011-2012 fiscal year that ended on March 31 on the back of high oil output and price, an economic report said yesterday. The Gulf state posted a historical budget surplus of 13.2 billion dinars ($47 billion) for the 13th consecutive fiscal year, the Al-Shall Economic Consultants said in a report citing official figures. The previous highest surplus of 9.33 billion dinars ($33.2 billion) was posted in the 2007-2008 fiscal year when oil prices skyrocketted to a record $147 a barrel. Kuwait had projected a deficit of $21 billion for 2011-2012 because it calculated oil income at $60 a barrel compared to the actual $110 a barrel and oil output at 2.2 million barrels per day compared to the actual production of 3.0 million bpd. Kuwait has projected a deficit in each of the past 13 fiscal years but ended in surplus mainly for calculating oil income at a very conservative price. During that period, the emirate has accumulated about $250 billion in budget surpluses and is also expected to end the current year in the black, if oil prices remain high. Under Kuwaiti law, 10 percent of revenues are deducted every year in favor of the emirate's sovereign wealth fund, the assets of which are estimated at about $400 billion. Returns on the fund are not included in the budget. Revenues in the past fiscal year hit a record 30.2 billion dinars ($107.5 billion), Al-Shall reported, more than twice the budget projections of $47.7 billion. Last year's income is 40.5 percent higher than the previous record of 21.5 billion dinars ($76.5 billion) posted in the 2010-2011 fiscal year. Oil revenues also reached a record 28.6 billion dinars ($101.7 billion) making up 94.5 percent of total income and more than twice the budget projections. Spending was 17.0 billion dinars ($60.5 billion), down 12.5 percent on budget projections but a small five percent rise from the previous year. Kuwait has not yet issued its budget for the current fiscal year of 2012/2013 although it has started on April 1 due to a political dispute between the government and parliament. The Gulf state adopts a cradle-to-grave welfare policy where a majority of citizens are employed by the government, receive handsome salaries, pay no taxes and receive services at low charges or for free. Kuwait, with a native population of 1.2 million in addition to 2.5 million foreigners, says it holds 10 percent of global crude reserves.