Kuwait City: Kuwait posted a record budget surplus of 13.2 billion dinars (Dh171.8 billion) in the fiscal year that ended March 31 as oil prices and output rose.
Government revenue was 30.2 billion dinars, including oil revenue of 28.6 billion dinars, according to data posted on the Finance Ministry’s website on Monday. Spending was 17 billion dinars, 12.5 per cent below budget, the data showed. Ten per cent of revenue is saved in the Reserve Fund for Future Generations.
“It’s a record surplus because oil production was high and average oil prices were over $100 in the last fiscal year,” Jasem Al Saadoun, head of Kuwait-based Al Shall Economic Consultants, said by phone on Monday from Kuwait City.
Government investments haven’t kept pace with the growth in salaries. Progress on a four-year development plan to modernise infrastructure and diversify the economy, in which private investors were due to contribute almost half of the $111 billion tab, has been set back by recurring political tensions.
Al Saadoun said that increases in spending on salaries and wages, which accounted for between 9 billion and 10 billion dinars in fiscal 2011-2012, are making it hard for the country’s economy to be competitive.
“Financially, Kuwait is in surplus but economically, the situation is in a deficit,” he said. “We are selling an asset and gaining money from it, but there is still no economic activity.”
The International Monetary Fund said in May that Kuwait will exhaust all oil revenue by 2017 if the government’s current spending policy continues. Former central bank governor Shaikh Salem Abdul Aziz Al Sabah resigned in February, criticising the government’s increase of public expenditures “to unprecedented levels”.
Kuwait, the fourth-biggest producer in the Organisation of Petroleum Exporting Countries, is producing as much as 3.05 million barrels a day, according to Kuwaiti oil officials.
