Kuwait Cabinet Approves Draft Budget with Deficit

Kuwait's cabinet on Thursday approved a draft budget for the 2014-2015 fiscal year projecting a 1.62 billion-dinar ($5.7 billion, 4.2 billion euro) deficit for the oil-rich Gulf State.

The OPEC member has projected a deficit in each of the past 14 fiscal years but ended each year in the black, accumulating more than $300 billion in budget surplus.

Spending in the coming year is estimated at 21.68 billion dinars ($76.6 billion), up 3.2 percent on the previous year's projections, while revenues are projected to reach 20.06 billion dinars ($70.9 billion), an official statement said.

Oil income is projected at 18.8 billion dinars or 94 percent of total income.

Oil revenues are calculated on the basis of a price of oil at $75 a barrel, up $5 from the current year, and a daily output of 2.7 million barrels, said the statement posted on the cabinet website.

Like the previous 14 fiscal years, oil revenues are expected to be much higher than the estimates because the actual price of oil is above $100 a barrel and Kuwait's daily crude production has been around 3.0 million barrels.

The emirate's fiscal year runs from April 1 to March 31.

Kuwait had projected spending of 21.0 billion dinars in the current fiscal year, and revenues of 18.1 billion dinars, leaving a deficit of 2.9 billion dinars.

But after just six months, Kuwait posted a provisional budget surplus 10.7 billion dinars, according to finance ministry figures.

In the previous 2012/2013 fiscal year, the emirate posted an actual surplus of 12.7 billion dinars. Revenues came in at a record 32.0 billion dinars and spending was 19.3 billion dinars.

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.

Kuwait has a native population of 1.2 million and is home to 2.7 million foreigners.