KUWAIT CITY, 6 January 2004 — OPEC member Kuwait is expecting a record surplus in the current fiscal year which ends March 31, its first fiscal year since the overthrow of its arch-foe, former Iraqi President Saddam Hussein, official figures show.
Figures posted on the Finance Ministry website show that at the end of last November, the eighth month of Kuwait’s 2003 2004 fiscal year, the emirate had already made 1.965 billion Kuwaiti dinars ($6.55 billion) in surplus.
If maintained, the figure would be the largest surplus in Kuwait’s history followed by 1.777 billion dinars ($5.93 billion) posted in 2000 2001, which was shortened by three months to change the start of the fiscal year. The excess was made mainly on the back of a huge increase in oil revenues and a sharp drop in spending, and is in spite of a projected budget deficit of 2.35 billion dinars ($7.85 billion).
The emirate posted 4.54 billion dinars ($15.13 billion) in oil revenues in the first eight months of the year which runs from April 1, 2003 to March 31, 2004.
The sum is larger than budget projections for oil income of 2.97 billion dinars ($9.9 billion) and even higher than total revenues for the whole year, projected at 3.555 billion dinars ($11.85 billion).
Kuwait had calculated its oil revenues at a conservative price of $15 a barrel at a daily output of around two million barrels. Average price for Kuwaiti oil has topped $25 a barrel for most of the current fiscal year.
Unofficial reports have also indicated that the emirate, which has a production capacity of 2.5 million barrels a day, has been producing over its OPEC quota. About 90 percent of Kuwait’s income comes from oil.
Non-oil revenues are also higher than projections, hitting 515.3 million dinars ($1.72 billion) at the end of November against an estimated 585 million dinars ($1.95 billion) for the whole year.
Local reports have predicted that total revenues at the end of the year would top the six-billion-dinar ($20-billion) mark, almost twice the budget projection.
Expenditures for the year were estimated at 5.909 billion dinars ($19.7 billion), but actual spending into two-thirds of the year was 2.57 billion dinars ($8.6 billion).
Economists, however, warn that spending is normally low for most of the fiscal year, but dramatically picks up in the last quarter with most ministries trying to spend their allocated budget. A surplus at the end of the current year would mean that Kuwait has boasted a budget in the black for the fifth year running, following a decade of sustained heavy losses.
Between 1990 and 1999, the emirate incurred accumulated deficits of 21.1 billion dinars ($70 billion) and managed a surplus of 63.2 million dinars ($210.1 million) only in 1996 97 fiscal year.
The emirate has made a net surplus of $9 billion in the past four fiscal years, in addition to $7.25 billion deposited in the Kuwait Fund for Future Generations (KFFG).
