KUWAIT: Higher revenue from oil helped Kuwait post a 3.8 billion dinars ($14.22 billion) preliminary surplus in the first quarter of its 2008/09 fiscal year, government data showed yesterday.

The government income of the world’s seventh-largest oil exporter in the three months to June 30 was 6.7 billion dinars, nearly 53 percent of a state forecast of 12.68 billion dinars for the whole fiscal year.

Oil revenue in the first three months was 6.29 billion dinars, compared with a forecast of 11.65 billion dinars for the fiscal year which started on April 1, the data showed.

The budget was based on a conservative oil price estimate of $50 per barrel. The price of OPEC’s reference crude oil basket, which includes Kuwaiti crude, rebounded to $111.79 on Wednesday from $110.51 the previous day, OPEC said yesterday.

The budget forecast an annual deficit of 7.55 billion dinars. Expenditure stood at 2.14 billion dinars in the first quarter, according to the data.

The Parliament approved in June the 2008/09 budget with record expenditure of 19 billion dinars, despite warnings by the central bank to contain spending to tackle record inflation.

Kuwait invests 10 percent of its revenues in a fund for future generations, which is managed by state-run Kuwait Investment Authority (KIA).

A surplus means KIA has more funds to spend on foreign investments.

The OPEC member posted a surplus of 9.32 billion dinars in 2007/08.

Iraq debt

Meanwhile, a local newspaper said yesterday that the Kuwaiti government will present a request to Parliament in its next session in October to forgive Iraq’s multibillion debt.

Kuwait has said that it would not allow the repayment of the estimated $15 billion to $16 billion debt to become a burden on Iraq, but only parliament can cancel it.

The government’s move came after the United Arab Emirates waived Iraq’s debts and Saudi Arabia pledged to do so, daily newspaper Seyassah reported quoting senior source.

The debt represents loans Kuwait made to Baghdad in the Saddam Hussein era, mostly during the 1980-1988 Iraq-Iran war.

Local media yesterday also carried statements from an Iraqi politician stating that Kuwait could cancel the debt.

“Our brothers in Kuwait told us that they are not demanding any debt and that there is no need to discuss this issue,” the head of the Iraqi parliamentary foreign relations committee Humam Hamoudi was quoted as saying by Al-Qabas newspaper.

“But the officials in the Iraqi government want to settle all the debt.”