Kuwait budget sees record spending, deficit

KUWAIT CITY: The Kuwaiti parliament on Thursday passed the budget for the 2008/2009 fiscal year, projecting a record spending of 18.966 billion dinars ($71.4 billion) and a massive deficit.Spending in the fiscal year from April 1 to March 31 is up a mammoth 68 per cent on last year's estimated expenditure of $42.5 billion.

The new budget, however, includes a $20.6 billion one-off payment to cover the deficit of the state-run pension agency.
Revenue is estimated at $47.6 billion, 52.8 per cent higher than the previous year's estimated income of $31.3 billion.

This would leave a huge budget deficit of $23.8 billion, but the emirate is still expected to have a healthy surplus because the budget adopted a conservative price of $50 a barrel in calculating oil revenues.

Kuwaiti oil averaged $75 a barrel during the last fiscal year and has been hovering above $100 since the start of the current fiscal year.

Oil revenues are estimated at $43.8 billion, the largest ever and 56 per cent higher than last year's projections.
Kuwait, the fourth largest OPEC producer, projected a deficit in each of the past nine years but eventually posted a surplus on the back of strong oil prices totalling more than $100 billion.

During the last fiscal year income was a record $71 billion, and a surplus of about $43 billion was posted.
The budget assumed oil production of 2.5 million barrels per day (bpd), whereas the emirate currently pumps 2.58 million bpd.

Kuwait, which says it holds 10 per cent of global crude reserves, has upwards of $260 billion in foreign assets. It has a native population of slightly more than one million in addition to 2.35 million foreign residents.Thirty-four MPs voted in favour of the new budget, 14 voted against and six abstained.