Kuwait issues $74 billion budget with deficit

OPEC member Kuwait said on Wednesday it has issued the 2013/2014 budget, with spending projected at 21.0 billion dinars ($73.7 billion), slightly short of last year's record expenditure of $21.2 billion.

The budget, issued by the emir in a decree because parliament is dissolved, projects a deficit of 2.9 billion dinars ($10.2 billion), much smaller than last year's estimated shortfall of $26 billion, the finance ministry said.

Kuwait's fiscal year runs between April 1 and March 31.

Kuwait has so far not released fiscal details of year to March 2013, but provisional figures show a huge surplus of around $38 billion.

Kuwait, which says it sits on 10 percent of global crude reserves, has projected a budget deficit every year for the past 14 fiscal years but has ended up with a healthy surplus, accumulating close to $300 billion.

For the year to March 2014, revenues are projected at 18.1 billion dinars ($63.5 billion), 30 percent higher than last fiscal year's projected income.

The 2013/2014 budget calculated revenues on the basis of a daily oil output of 2.7 million barrels and a price of oil of $70 a barrel. Last year's budget had taken into account a daily oil production of 2.2 million bpd and the crude price at $65 a barrel.

Oil revenues are estimated at 16.9 billion dinars ($59.3 billion) or 93.3 percent of total income, said the finance ministry, cited by the official KUNA news agency.

Kuwait's public and oil revenues are expected to almost double at the end of the fiscal year because its actual oil output is 3.0 million bpd and oil prices are expected to remain above $100 a barrel for most of the year.

Due to higher than expected income driven by firm oil prices, Kuwait decided for the second year in a row to transfer 25 percent of revenues into the emirate's sovereign wealth fund whose assets are currently estimated at over $400 billion.

Despite abundant cashflow, development has been stalled in Kuwait due to a chronic political crisis that has seen parliament dissolved on six occasions and the cabinet resign about a dozen times since mid-2006.

Kuwait has a native population of 1.22 million in addition to 2.7 million foreigners.