Large Kuwait records large fiscal surplus

Strong oil prices pushed Kuwait’s actual revenue above their target for the entire fiscal year and allowed it to bask in a massive budget surplus of more than $32 billion, according to a key bank in the Gulf emirate.

Spending was up by around 12.1 per cent year-on-year to nearly KDfive billion ($18 billion) in the first six months of the 2011-2012 fiscal year, which began on April 1, National Bank of Kuwait said in a study.

Revenue, mostly from oil exports, totalled nearly KD13.9 billion ($50.04 billion), exceeding the budgeted yearly revenue by around KD500 million, it said.

“Halfway into the year, Kuwait’s budget revealed a massive surplus of KD 8.9 billion ($32.04 billion). We forecast a similar surplus for the entire fiscal year (as spending picks up later in the year),” the report said.

 With KD five billion in actual total expenditures, Kuwait would have spent about 26% of the current fiscal year budget, the report added.

A breakdown showed spending on wages and salaries, reached KD one billion ($3.6 billion), up 10% on the comparable period.

The report noted that the government had lately approved a series of salary hikes that were on top of the usual annual salary increases. “This “chapter” is projected to grow 24% for the whole year.”

Non-oil revenues totaled KD 638 million ($2.29 billion), up 11% y/y. The increases were led by “miscellaneous revenues and fees” most likely due to compensation payments from the United Nations Compensation Commission.

Kuwait is expected to have basked in a massive fiscal surplus of nearly $17 billion in fiscal 2010-2011 and the balance could widen this fiscal year.

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