KUWAIT CITY: Kuwait earned 6.64 billion dinars ($23.1 billion) in the first five months of its fiscal year, about 82 percent of projected annual income, as oil prices rose, official figures showed on Thursday.
The OPEC member’s oil revenues in the five months to August came in at 6.24 billion dinars ($21.7 billion), or 90 percent of the projected oil income for the 2009/2010 fiscal year that began on April 1, according to figures posted on the Finance Ministry website. Kuwait has projected revenues of 8.07 billion dinars ($28.1 billion), calculating oil income at a conservative price of just $35 a barrel.
Oil, however, has gradually risen from lows of around $30 per barrel at the end of last year and into this year. It was holding above $70 a barrel in trade on Thursday.
Although actual earnings are much higher than budget projections, they are far below the income of the previous fiscal year, when oil rallied to an all-time high of $147 per barrel in July.
The global economic downturn, however, has hit demand for hydrocarbons worldwide, prompting worries that the world’s top oil exporters in the Gulf would witness an economic slowdown after six years of an oil-fueled boom.
In the first five months of the 2008/2009 year, Kuwait posted 12.84 billion dinars ($44.7 billion) in revenues, almost twice as much as this year when the price of oil, which contributes 94 percent of revenues, peaked.
OPEC’s fourth-largest producer finished last fiscal year with a surplus of 2.75 billion dinars ($9.6 billion) despite making a one-off payment of 5.5 billion dinars ($19 billion) to the state pension fund.
Kuwait’s actual spending in the five months until the end of August was 2.4 billion dinars ($8.3 billion), way below the budget spending estimates of 12.1 billion dinars ($42.1 billion), the ministry said. The Gulf emirate has projected a deficit of four billion dinars ($14 billion) in the current fiscal year but local banks are forecasting a surplus of up to six billion dinars ($21 billion).
This would be Kuwait’s 11th straight year of budget surplus. In the past 10 years, it has accumulated around $123 billion of budget surplus based on available official data.
The emirate has been investing its savings abroad through Kuwait Investment Authority, the sovereign wealth fund whose assets are estimated at around $230 billion.
Kuwait says it sits on 10 percent of global crude reserves and pumps around 2.2 million barrels per day.