Kuwait posted a net surplus of 707 million dinars ($2.3 billion) in the 1999/2000 fiscal year which ended June 30 after deducting 10 percent of revenues for a reserve fund, the finance minister said Monday. The surplus is the largest since 1991 when Kuwait was liberated from seven months of Iraqi occupation.
Total revenues collected were 5.24 billion dinars ($17.06 billion), while expenditures dropped to 4.01 billion dinars ($13.06 billion), Sheikh Ahmad Abdullah al-Sabah told the KUNA news agency.
By law, 10 percent of total revenues — or $1.7 billion dollars — must be transferred into the Kuwait Fund for Future Generations (KFFG), a 60-billion-dollar investment fund managed by Kuwait Investment Authority (KIA).
The net surplus is normally transferred into the state general reserve, but this year the money will most likely be used to repay some of the $80 billion the government has withdrawn from the KFFG over the past 25 years.
Kuwait had estimated its 1999/2000 revenues at $7.24 billion and expenditures at $14.13 billion, leaving a projected deficit of $7.61 billion after deducting the 10 percent of revenues. The price of oil, whose revenues make up more than 90 percent of the emirate's total income, was calculated at $10 a barrel last year and $13 for the current year.
Returns from the emirate's 60-billion-dollar foreign assets, estimated at about three billion dollars, are not included in this surplus.
Based on an average oil price of $27 a barrel, and a production of 2.2 million barrels per day (bpd), oil revenues in the first quarter of 2000/2001 fiscal year were estimated at 1.650 billion dinars ($5.37 billion). In July and August alone Kuwait collected 967 million dinars ($3.15 billion) from oil exports.
Kuwait's Organization of Petroleum Exporting Countries (OPEC) output quota was raised to 2.101 million bpd from October 1 and is increasing by a further 40,000 bpd from Monday.
Kuwait's current fiscal year, which started on July 1 and ends on March 31, 2001, was reduced to nine months because of a change in the year so as to start on April 1 rather than July 1. It projects a deficit of five billion dollars.
But the emirate looks headed for another record surplus for the second successive year with oil prices currently hovering around 10-year highs. — (AFP, Kuwait City)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)