Kuwait’s government spending  rose eight per cent in the first 10 months of this fiscal year compared with the same period the previous year but is still far below its initial plan, preliminary finance ministry figures showed.
The major oil exporter’s public expenditure reached KD10.58 billion ($37.6 billion) in the April-January period, up from KD9.78 billion a year ago but little over half of its spending plan of KD21 billion for the fiscal year ending in March.
The OPEC member has been undershooting its budget plans  as political wrangling delays budget approvals in parliament and investment spending.
That together with high oil prices has helped the Gulf Arab state build large fiscal buffers. But economists say it needs to control public wage growth and other non-investment spending in order to keep posting budget surpluses into the next decade.
The International Monetary Fund  warned in December that it will be important for Kuwait to restrain the rising public sector wage bill and subsidies because any sustained period of low oil prices could reduce its budget surpluses.
In October, the prime minister described the country’s welfare system as unsustainable. Kuwait, which relies on oil for around 94 per cent of its income, provides a generous cradle-to-grave welfare system for its citizens.
Senior government officials have talked more frequently about the risk to Kuwait’s budget surplus . But it is unclear whether the cabinet will be able to push through unpopular economic reforms such as reducing subsidies or halting wage growth.
State revenue was KD26.63 billion in the April-January period, slightly below KD27 billion in the same period last year but well above a conservative full-year plan of KD18.10 billion. Oil income stood at KD24.76 billion.
That put the fiscal surplus  for the 10 months at KD16.05 billion, or 31.3 per cent of the country’s 2012 gross domestic product, according to a Reuters calculation based on the latest official data. Kuwait pencilled in a deficit of KD2.91 billion in its 2013/14 plan.
A Reuters poll in January showed analysts forecast a fiscal surplus of 23.5 per cent of GDP for 2013/14 and 20.7 per cent for the next fiscal year.
Kuwait pledged $4 billion in aid to Egypt after the overthrow of Islamist Egyptian President Mohamed Mursi in July, and quickly began disbursing that aid. It was not clear whether the latest data reflected that cost.