KUWAIT CITY, (AFP) — Kuwait is set to post a surplus of 24 billion dollars in the current fiscal year on the back of higher oil prices, despite projecting a shortfall, an economic report forecast on Sunday.
Revenues for the oil-rich emirate are expected to hit 61.8 billion dollars in the year to March 31, far above budget projections of 28.1 billion dollars, said the report by the private National Bank of Kuwait.
Oil income, which makes up about 94 percent of total revenue, is expected to reach 57.8 billion dollars, also considerably higher than the budget forecast of just 24.1 billion dollars.
Kuwait calculated oil income at a conservative price of 35 dollars a barrel, while average price for the year is expected to be double that at around 69.5 dollars, according to the report.
Spending is forecast to reach 37.8 billion dollars, about 10 percent below budget projections of 42.1 billion dollars, the bank said.
Kuwait, the fourth largest producer in the oil cartel OPEC, posted a preliminary budget surplus of 25.2 billion dollars in the first nine months of the fiscal year, according to the finance ministry’s website.
The huge surplus is expected to fall in the final quarter due to end-of-year accounting adjustments when pledged expenditure not included so far will be added to the closing statements.
Kuwait had projected a deficit of 13.8 billion dollars for the current fiscal year.
The Gulf state has projected shortfalls in the past 10 fiscal years but eventually ended with a massive surplus in all of them.
It finished last fiscal year with a surplus of 9.6 billion dollars despite making a one-off payment of 19 billion dollars to the state pension fund.
This would be Kuwait’s 11th straight year of budget surplus. In the past decade, it has accumulated about 123 billion dollars of budget surplus, based on available official data.
The emirate, which transfers 10 percent of revenues every year into its sovereign wealth fund run by the Kuwait Investment Authority, is estimated to have assets worth about 230 billion dollars.
Kuwait says it sits on 10 percent of global crude reserves and pumps about 2.2 million barrels per day. It has a population of 1.1 million of its own citizens, and 2.34 million foreign residents.