Kuwait hurt by oil price plunge
Dec 21 2008 14:50
Kuwait City - Opec member Kuwait earned 1.255bn dinars ($4.65bn) in November, its lowest monthly income this year due to the sharp decline in oil prices, the finance ministry said on Sunday.
The oil-rich emirate's revenues have been declining since peaking at $12.9bn in August as the price of Kuwaiti oil, which makes up 95% of public income, dived to $35 a barrel from around $140 in July.
Nevertheless, the Gulf state still posted a healthy income of 17.7bn dinars ($64.4bn) in the first eight months of the 2008/2009 fiscal year, up 40% on the budget target for the year ending on March 31.
Oil revenues came in at 16.8bn dinars ($61.2bn), 44% above budget projections of $42.4bn based on a price of $50 a barrel.
Kuwait, which says it sits on 10% of global oil reserves, was pumping about 2.6m barrels per day but recent Opec cuts have reduced its output quota to around 2.2m barrels per day.
Spending in the first eight months was 7.9bn dinars ($28.7bn), less than half of the 18.966bn dinars ($69bn) in budget outlays forecast for the entire year.
That leaves a preliminary budget surplus of 9.8bn dinars ($35.7bn) although the budget projects a massive full year deficit of $23.5bn.
The surplus is expected to shrink considerably when the finance ministry makes the end-year accounting adjustments by including pledged spending which has not been registered so far.
The results, however, put Opec's fourth largest producer well on track to post a budget surplus for the 10th straight year.
Local economic reports have said the budget surplus will be much smaller than initially forecast, and it is now estimated at around $10bn - down from the expected $40bn.
The reports indicated that the emirate will post its first budget deficit in the next fiscal year if oil prices do not rebound.
In the past fiscal year which ended on March 31, the Gulf emirate achieved a record surplus of 9.33bn dinars ($35bn).
Based on official figures compiled by AFP, Kuwait has chalked up a total budget surplus of 30.35bn dinars ($113bn) over the past nine fiscal years starting with the 1999-2000 year.
The emirate, which has foreign investments worth $264bn, has a native population of just over one million, plus $2.35m foreign residents.
- Sapa
