KUWAIT: Kuwait expects to spend around 1bn dinars ($3.5bn) less in the 2013/14 fiscal year, according to the state budget published by the Ministry of Finance on Wednesday, despite the major oil producer forecasting higher revenue.
Kuwait, one of the world’s richest countries per capita, hiked state spending by 13 percent in the last fiscal year as it grappled with a wave of industrial unrest. However, since then, the International Monetary Fund warned Kuwait risks exhausting all of its oil savings by 2017 if it keeps spending money at the current rate.
A recently approved budget bill estimated overall revenues, after deducting 25 percent for the Future Generations Fund (FGF), at 13.57bn dinars compared with an expected total expenditure estimated at about 21bn dinars, Kuwait’s state news agency (KUNA) reported citing Khalifa Hamada, undersecretary at the ministry of finance.
This compares to revenues of 14bn dinars before the FGF deduction and expenditures of 22bn dinars in the previous fiscal year. In a bid to invest more efficiently, Kuwait announced last September that it would more than double the portion of revenues it puts into a rainy day fund for when oil runs out or the economy faces severe shocks.
The state budget for the 2013/2014 fiscal year is projected to face a deficit of around 7.43bn dinars ($26bn), Hamada said. Kuwait booked a record budget surplus of 13.2bn dinars in 2011/2012 thanks to strong oil income and lower spending.
Hamada added that the approved budget for the fiscal year ending in March 2014 estimated oil revenues at 16.88bn dinars, about 93.3 percent of the total state revenues, and non-oil revenues at 1.21bn dinars, or 6.7 percent of the overall revenues.
Reuters
