KUWAIT CITY, 26 September 2004 — Oil-rich Kuwait posted an actual surplus of $4.8 billion in the 2003/2004 fiscal year that ended March 31, its fifth consecutive windfall, on the back of high oil prices and output, a specialist report said yesterday.
Initial figures had put the surplus at 2.23 billion dinars ($7.5 billion), but an upward adjustment of expenditures reduced the figure, according to the independent Al-Shall Economic Consultants. The OPEC member finished the last fiscal year with actual expenditures at 5.52 billion dinars ($18.7 billion), up from the preadjustment figure of 4.7 billion dinars ($15.9 billion), it said.
Upward adjustments in Kuwait’s expenditures are common to account for spending by government institutions in the last fiscal month which does not automatically appear in state accounts.
Actual spending was seven percent down on budget estimates of 5.94 billion dinars ($20.1 billion).
Actual revenues came in at 6.94 billion dinars ($23.5 billion), the highest since 1979, with oil revenues at $20.8 billion and non-oil income at $2.7 billion, the report said.
Revenues were almost 95 percent higher than budget projections of $11.85 billion. The majority of the increase was attributed to the hike in oil income which soared 79 percent over budget estimates. Oil income contributes around 90 percent of total public revenues. The average price of Kuwaiti oil during the year was $26.9 a barrel, compared with the 15-dollar figure used to calculate the budget.
According to law, 10 percent of total revenues, $2.3 billion in this case, is placed in the Kuwait Fund for Future Generations (KFFG), a state reserve fund managed by the state-run Kuwait Investment Authority (KIA). KFFG is estimated to be worth more than $70 billion, most of it in overseas investments.
Based on official statements and economic reports, the emirate has been producing almost to full output capacity of 2.5 million barrels per day. Kuwait posted a surplus of $4.3 billion in 2002 2003, recording revenues of $20.7 billion and expenditures of $16.4 billion.
It has projected a deficit of $10.1 billion for the current 2004/2005 fiscal year, which started on April 1, based on the assumption of a substantial slide in oil revenues.
Expenditures are projected at 6.30 billion dinars ($21.35 billion) while revenues are estimated at 3.32 billion dinars ($11.25 billion). But available data indicates that the emirate is heading for its sixth consecutive surplus.