Oil price hike to record budget surplus in fiscal 2018/’19

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State to increase production of non-associated gas up to 500 mln cubic feet per day

KUWAIT CITY, June 20: Governmental and private investments support the average growth of non-hydrocarbons – about 3.5 to 4 percent from 2018 to 2021, reports Al-Shahed daily.

Concurrent with the increasing prices of oil compared to prices recorded in the previous years is the opportunity for the State to record a budget surplus in fiscal 2018/2019.  According to statistics viewed by the daily, the expected oil revenue for the present fiscal year exceeds KD 20.88 billion. This means the revenue will cover the KD 20 billion expenses inserted in the budget. The budget for fiscal 2019/2020 will be KD 20 billion as well, while it will be increased to KD 21 billion in the 2021 budget.

The Ministry of Finance said the estimated oil revenue is KD 15 billion, while the estimated expenditure is KD 20 billion based on the KD 50 per barrel price of oil. The revenue is expected to increase by KD 6 billion, giving the chance for the budget to fulfil about seven percent of the total national income for fiscal 2018/2019 due to the increasing price of oil. A budget deficit of KD 7.9 billion is expected if the price of oil remains at the estimated value of KD 50 per barrel.  The statistics showed that the economic reforms implemented during the period of oil price decline in Kuwait is considered the least compared to those enforced in other Gulf countries.

There are some indicators that the budget will achieve surplus of about eight percent of the total national income in fiscal 2018/2019. Such indicators include the country’s plan to spend KD 37 billion in the coming five years. About 70 percent of the aforementioned amount will be allocated for oil explorations in and outside Kuwait.  In addition, the country intends to increase production of non-associated gas up to 500 million cubic feet per day by the end of 2018.



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