OPEC member Kuwait is projecting a budget deficit of 1,825.7 million dinars ($5.95 billion) for the fiscal year 2001-2002 despite high oil prices, Finance Minister Sheikh Ahmad Abdullah Al-Sabah said Saturday.
Expenditure is forecast at $17.18 billion and revenues at $12.48 billion, with oil income projected at $10.63 billion, or 85 percent of the total.
By law, 10 percent of revenues, amounting to $1.25 billion in this case, is deducted for the Kuwait Fund for Future Generations, a $60-billion investment managed by the Kuwait Investment Authority.
Oil revenues are being calculated on the basis of a conservative $15 a barrel at a daily production rate of 2.141 million barrels, Sheikh Ahmad told reporters after presenting the budget to parliament's budget panel.
Kuwait's crude oil is currently averaging $22 a barrel, but the emirate's production quota will be reduced to 2.021 million barrels per day (bpd) from February 1 following an OPEC output cut.
The fiscal year 2001-2002 is to begin April 1 for the first time after the emirate brought forward the start of its fiscal year from July 1 and shortened the 2000-2001 budget to nine months.
Salaries and wages for government staff will account for more than five billion dollars of expenditure. More than 93 percent of the 220,000-strong public work force is Kuwaiti.
Allocations for construction and development project and other forms of capital expenditure have been increased to $3.74 billion from less than two billion dollars in previous years.
But the biggest allocation of $8.25 billion goes to "miscellaneous expenses," which include defense spending and army wages.
The oil-rich emirate posted a surplus of four billion dollars in the 1999-2000 fiscal year that ended on June 30, and is expected to boast an even higher surplus of up to five billion dollars in the current year.
Returns from the Gulf emirate's $60-billion foreign assets, estimated at about three billion dollars, are not included in the surplus.
The budget projections, which were approved by the cabinet two weeks ago, still need parliamentary approval before coming into force. — (AFP, Kuwait City)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com )