Kuwait Posts Healthy Budget Surplus on Record Income

OPEC member Kuwait posted a healthy budget surplus of 5.3 billion dinars ($19.5 billion) in the last fiscal year on record revenues thanks to high oil prices, the finance ministry said on Thursday.

Revenues in the year ended March 31 hit 21.5 billion dinars ($79 billion), the highest ever in the emirate's history, according to figures on the ministry's website.

That exceeded projections of $35.7 billion on the back of high oil prices throughout the year and producing over the emirate's OPEC quota of 2.2 million barrels a day.

Kuwait's current oil production is at between 2.6 million and 2.7 million barrels a day, according to Oil Minister Mohammad al-Baseeri.

Spending was at 16.2 billion dinars ($59.5 billion), just 92 percent of the budget projections of $64.3 billion.

Kuwait has projected a deficit in each of the past 12 fiscal years but ended in surplus mainly for calculating oil income at a very conservative price.

During that period, Kuwait has accumulated about $200 billion in budget surpluses and is also expected to end the current year in the black, if oil prices remain high.

Oil income was $73.3 billion, more than twice the amount estimated in the budget, which was based on $43 a barrel compared to an actual price of more than $100 dollars.

The budget for the 2011/2012 fiscal year also projects a deficit of $22 billion because of projecting a record spending of $71.5 billion.

The Gulf state adopts a cradle-to-grave welfare policy where a majority of citizens are employed by the government, receive handsome salaries, pay no taxes and receive services at low charges or for free.

Under Kuwaiti law, 10 percent of revenues are deducted every year in favor of the emirate's sovereign wealth fund, the assets of which are estimated at about $300 billion.

Returns on the fund are not included in the budget.

Kuwait says it holds 10 percent of global crude reserves.