Kuwait’s budget boasts nearly KD7.1 billion surplus
If oil prices remain high Kuwait will rest in another large fiscal surplus at the close of their current 12 month fiscal period. This is despite the inflated spending the emirate has done as part of their expansive investment package, a leading Kuwait bank stated recently.
The forecasted price of crude in the 2010-2011 Kuwait budget was $43, but the average prices at the close of the year beginning on April 1 are anticipated to be much higher, according to a study put out by the Nation Bank of Kuwait (NBK)
Because of those increases Kuwait’s budget will boast a KD7.1 billion (Dh88 billion) surplus, this despite the expansive deficit the government had expected, the study said.
The Kh6.4 billion deficit projected for the current year was included in temporary budgets and the study indicates that a variety of oil price possibilities will transform the deficit into a surplus by varying degrees.
The report says that the government stated price of $43 is “very conservative” and that crude oil will end up bringing in much more than the government had anticipated.
It also stated that calculated scenarios for the 2010 – 2011 year would yield a government surplus from KD0.1 billion up to KD7 billion .
The calculations also included all committed investments falling within the government’s four year development plan and their increased spending that is rising almost 33 per cent.
NBK noted that improved oil prices in 2009 and 2010 resulted in unexpectedly large financial surpluses for the nation as well.
They made an estimate of the surplus amount with lower priced scenarios at KD6.4 billion. With a base case it would be KD6.7 billion and almost KD7 billion in the highest cases.
This is just one of the recent and rising fiscal surpluses the oil giant has enjoyed the last few years. Kuwait had another boom in the oil industry and jumped at the opportunity to transform a few years of deficits and a volatile economy into a viable, wealthy budget and economy. They are the holder of the fourth largest oil deposit after Saudi Arabia, Iran and Iraq.
All of that ended in September of 2008 when crude dropped over $100 during the global economic crisis.
NBK states in an earlier study that the nation’s cumulative surplus sits at approximately $71.2 billion for the period of time between 2005 and 2008.Paul Holdsworth, Staff Writer, Gulf Jobs Market News