Kuwaiti cabinet approves $75.6bn spending
Kuwait, October 9, 2012
Kuwait's cabinet approved a slightly revised budget for the current fiscal year with projected expenditure of 21.24 billion dinars ($75.6 billion), state news agency Kuna reported.
The draft law, which still needs approval of the country's ruler, sees revenues at 13.93 billion dinars, Kuna said, citing Finance Minister Nayef Al-Hajraf.
The country already announced a draft budget in March for the current fiscal year which ends next March 31, but political turmoil means it has not been approved by parliament. Instead, Hajraf said last month that he expected the budget to be approved by the emir's decree.
The figures announced on Tuesday are broadly similar to the previous version of the budget, and envisage a spending increase of about 9.5 percent from last fiscal year's budgeted spending and 25 percent from last year's actual spending.
The original budget projection was based on an oil price of $65 a barrel. Although the plan assumes a budget deficit, global oil prices are currently trading well above $100, so Kuwait is likely to post a surplus.
The draft takes into account a plan announced last month to more than double the portion of state revenues which the country puts into a rainy day fund, Kuna said. Kuwait plans to put 25 percent of revenues into the future generations fund, compared to 10 percent at present.
The Opec member state booked a record budget surplus of 13.2 billion dinars in 2011/2012, thanks to strong oil income and lower spending.
While Kuwait's fiscal position is strong, it has been struggling with persistent political upheaval which has held up investment plans. Analysts also say it needs to diversify its oil-reliant economy.
Kuwait's ruler ordered the dissolution of parliament on Sunday, opening the way to a parliamentary election after months of political deadlock. It was the sixth dissolution of parliament since early 2006. - Reuters