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Budget surplus drops as spending rises 18%

KUWAIT CITY, Feb 9, (AFP): Kuwait’s provisional budget surplus shrunk in the first nine months of this fiscal year as spending rose 18 percent and income was unchanged, according to official figures released Sunday.

The provisional budget surplus of the OPEC member dropped 11 percent to KD 14.34 billion ($50.7 billion; 37 billion euros) at the end of December compared to KD 16.1 billion in the same period of the previous year, according to figures posted on the ministry of finance website. Spending in the nine-month period was KD 9.64 billion compared to just KD 8.16 billion in the same period of the previous fiscal year. Kuwait’s fiscal year runs from April 1 to March 31.

Revenues in the first three quarters of the 2013/2014 fiscal year came in at KD 24.0 billion, slightly less than the 24.26 billion posted in the same period of the previous year. Oil income, which makes up over 92 percent of total revenues, dropped slightly from KD 22.84 billion in the 2012-2013 fiscal year to KD 22.2 billion in the current year.

Spending on development project has been hampered by political disputes in recent years, but picked up slightly in recent months with the award of a number of megaprojects worth several billion dollars. Kuwait is projecting spending in the current fiscal year, which ends on March 31, at KD 21.0 billion, with revenues at KD 18.1 billion, leaving a deficit of KD 2.9 billion.

Kuwait has projected a deficit in each of the past 14 fiscal years but ended with large surpluses because it assumes a conservative price for oil. In the previous fiscal year, the emirate posted an actual surplus of KD 12.7 billion, following a record 13.2 billion-dinar surplus in 2011- 2012. Thanks 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, the assets of which are currently estimated at over $400 billion.

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