KUWAIT CITY, 20 October 2004 — OPEC-member Kuwait is on track to boast its highest income in more than three decades after the Finance Ministry reported yesterday a sharp rise in earnings in the first half of the current fiscal year.
Figures posted on the ministry’s website show that at the end of September, Kuwait collected 4.34 billion dinars ($14.7 billion) in the first six months of the 2004 2005 year due to soaring oil prices and higher output. The figure is 30.5 percent higher than budget estimates for the whole year of 3.32 billion dinars ($11.25 billion). Revenues have increased sharply in the past three months on the back of strong oil prices which have crossed $40 a barrel for the Kuwaiti crude. Oil income is calculated in the budget at a highly conservative price of $15 a barrel.
The state budget for fiscal 2004 2005 estimates spending at 6.3 billion dinars ($21.3 billion), leaving a projected deficit of three billion dinars ($10 billion). Oil revenues are estimated at $9.3 billion and non-oil revenues at $1.95 billion for the fiscal year from April 1 to March 31, 2005.
Official figures, however, show that oil income in the first six months reached about four billion dinars ($13.4 billion) while non-oil revenues were 377 million dinars ($1.3 billion). Actual revenues at mid-year recorded an increase of 23.5 percent on the $11.9 billion collected in the same period of 2003 2004 fiscal year. Oil revenues showed an increase of 27.6 percent on last year while non-oil revenues dropped about 10 percent, the report said. Spending in the first half of the year was 1.95 billion dinars ($6.6 billion) or just under one-third of projected spending for the whole year.
Kuwait’s OPEC production quota was raised to 2.167 million barrels per day (bpd) from November 1, but the emirate has been producing at full capacity of 2.5 million bpd for a long time. It plans to raise output by another 200,000 bpd this month. If oil price and output remain at the current level, Kuwait will post an income in excess of $30 billion this year, the highest in more than three decades. Budget surplus will be higher than $10 billion.
Last fiscal year, Kuwait posted revenues of $23.5 billion, the largest in more than 25 years, and boasted a surplus of $4.8 billion, its fifth straight year in the black.
Parliamentary sources have put the size of Kuwait’s total financial reserves at $96.9 billion on March 31, an increase of about 30 percent compared with the previous fiscal year. The reserves are managed by the state-run Kuwait Investment Authority, mostly in Europe and the United States in real estate, stocks and other long-term investments. Returns on foreign investments, estimated last year at about $3 billion, do not show in the budget.
