Kuwait likely to boost spending to $52b

Kuwait City : Kuwait may increase spending to as much as 15 billion Kuwaiti dinars (Dh155 billion, $52 billion) in the fiscal year starting on April 1 as it boosts investment in infrastructure, Finance Minister Mustafa Al Shimali said.

Spending will be between 12 billion dinars and 15 billion dinars, the minister told reporters in parliament yesterday. Al Shimali said he would not provide any other details of the new budget until it is presented to the Cabinet.

Parliament yesterday gave its preliminary approval to a four-year 37 billion dinar development plan, part of which is included in the budget for the 2010-2011 fiscal year.

The programme includes major investments to increase oil and gas production, a railway network, new cities and construction of a port on Boubyan Island. Its cost may be revised, Deputy Prime Minister for Economic Affairs, Shaikh Ahmad Al Fahd Al Sabah, told reporters yesterday in parliament after the vote.

A second and final round of balloting is not expected before two weeks.

Projected spending for the current fiscal year ending March 31 is 12.1 billion dinars and revenue 8.1 billion dinars. Kuwait recorded a budget surplus of 2.74 billion dinars in the 2008-09 fiscal year as the fifth-biggest producer of the Organisation of Petroleum Exporting Countries benefited from higher oil sales.

Kuwait's inflation slowed to 5.7 per cent in March 2009 from 5.9 per cent in the previous month, according to a person familiar with the matter.

Food prices rose an annual 4.7 per cent, compared with 5.4 per cent in February, said the person, who spoke on condition of anonymity as the data hasn't officially been released. Housing cost growth slowed to 6.7 per cent in March from 7.5 per cent in February.

Kuwait's central bank hasn't released inflation data since July.

Areva stake

Kuwait may be interested in buying a stake in French nuclear-reactor builder Areva SA, the news agency Kuna reported, citing unidentified people in the industry.

"Executives at Areva also confirmed to Kuna that the company had sent delegations to Kuwait to discuss future cooperation and Kuwait has expressed an interest in acquiring civil, nuclear energy from the French company," the news agency said.

Areva chief executive officer Anne Lauvergeon said the company is seeking fresh capital and foreign investors, Kuna added, citing unidentified parliamentarians. Talks are being held at a government level and a number of partners are involved, the news service said.

Kuwait plans to appoint an international adviser to study a possible investment in Areva, which may be financed by the $1.1 billion profit made by the Kuwait Investment Authority from the sale of its stake in Citigroup last year, Al Jarida reported on January 10.