Kuwait's budget surplus reaches nearly $42bn

Kuwait's budget surplus reached KD11.6bn ($41.6bn) in the first eight months of its 2011-12 fiscal year, double than a year ago on higher than expected oil revenue and lower spending, finance ministry data showed on Tuesday. The surplus accounted for 33 percent of the OPEC member's 2010 gross domestic product, according to Reuters calculations. It stood at KD5.9bn in the same period a year ago. Revenue of the world's sixth-largest oil exporter was KD18.7bn in April-November, while spending came at KD7.1bn, a mere 36.6 percent of the full-year plan, the data posted on the finance ministry's website showed. Oil revenue reached KD17.8bn in April-November, accounting for 95 percent of the total. The 2011-12 budget is based on an oil price of $60 per barrel. Brent crude prices have been floating between $98 and $127 per barrel since the fiscal year started in April. On Tuesday, Brent crude futures extended gains to more than $4, pushing above $111 per barrel on potential threats to supply and supportive data from China, with the dollar's weakness and a strong open for equities on Wall Street also helping boost oil. Since 2004, Kuwait's budget spending has tripled to a record KD19.4bn planned for the 2011-12 fiscal year, which started in April, with expenditure on wages rising almost as fast. Revenue was set at KD13.4bn in the 2011-12 budget, approved by parliament in June, bringing the projected deficit to KD5.99bn, or 16.8 percent of gross domestic product, according to Reuters calculations. However, the 2011-12 revenue estimate is very conservative given last year's surge in the price of oil. In August, Kuwait's ruler said the misuse of budget surplus, including unproductive spending, has led to structural imbalances in the Gulf Arab economy. The country of 3.6 million people has no plans to boost budget spending in the next fiscal year, nor does it expect budget cuts, its finance minister said in September. A Reuters poll in December forecast Kuwait's economy would grow 3.5 percent in 2012 and generate a fiscal surplus of 22.9 percent of GDP in 2011-12, the largest among Gulf Arab oil exporters.