Kuwait’s budget surplus edged up to 12.9 billion dinars ($ 44.8 billion) in the fiscal year to last March as government spending fell, largely because of a drop in capital expenditure, Finance Ministry data showed.
The figures suggest Kuwait is still struggling to spend its oil wealth on economic development because of bureaucratic red tape and political conflict between the cabinet and parliament, which has slowed big infrastructure projects.
The budget surplus, equivalent to around 26 percent of gross domestic product, was up marginally from 12.7 billion dinars, or nearly 25 percent of GDP, in the previous fiscal year.
Kuwait has posted budget surpluses since 1995 but its rising public sector wage bill and large subsidies are expected to slash the surplus to around 12.1 percent of GDP in 2019, the International Monetary Fund estimated in April.
Total expenditure fell 2.1 percent from the previous year to 18.9 billion dinars in the 2013/14 fiscal year, to well below the 21.0 billion dinars originally planned, the data showed.
Public wages, which account for more than a quarter of current spending, continued to grow, adding 4.3 percent to 5.0 billion dinars, although the increase was the slowest in over a decade, National Bank of Kuwait economists Dana Al-Fakir and Nemr Kanafani said in a research note.
Meanwhile, spending on projects, maintenance and land purchases dropped 7.3 percent to 1.5 billion dinars, which the analysts said was partly due to slow progress in the government’s development plans.
“We expect to see some improvement within the coming years as the new five-year development plan for fiscal years 2015/16-2019/20 gets underway,” NBK said.
Revenue edged down to 31.8 billion dinars last fiscal year from 32.0 billion dinars in the previous year because of a 2.3 percent decline in oil income. Crude oil accounts for more than 90 percent of Kuwait’s government revenues.
Kuwait’s crude oil price averaged $ 103 per barrel last year, down 3 percent from a year earlier, while oil production remained largely unchanged at an average of 2.9 million barrels per day, NBK said.
Gross domestic product grew a meager 0.8 percent in calendar 2013, the IMF has estimated, the worst performance since a 2009-2010 recession and sharply down from a 6.2 percent expansion in 2012.
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