Page 8 - MEOG Week 31

MEOG FinanCe & inVestment MEOG
Kuwait’s final budget shows $11bn deficit for FY2018/2019
KuWait
PRELIMINARy budget gures for Kuwait’s s- cal year 2018/2019 (Fy2018/2019) that ended in March showed the budget surplus narrowed by 31% y/y to KWD3.34bn ($11bn) a er expensing a mandatory 10% of revenues to be transferred to the Fund for Future Generations (FFG), the nance ministry said in a statement.
Kuwait’s government has reached the debt ceiling limit stipulated by legislation and nanced the de cit through reserve drawdowns.
e contraction in the budget de cit was pri- marily driven by a spike in oil income growing by 29% y/y to KWD18.4bn with Kuwait selling on average 2.8mn barrels of oil per day at an average price of $68.6 per barrel.
Non-oil income increased by 24% y/y to KWD2.13bn mainly due to a 30% y/y jump in the catch-all other income category to KWD1.45bn. As a result, overall budget reve- nues rose by 28.5% y/y to KWD20.55bn.
On the expenditures side of the balance sheet, Kuwait’s total state spending, before expensing 10% of revenues to fund obligations towards the FFG, increased by 13.5% y/y to KWD21.84bn.
This was partly due to a 4% y/y increase in state employee compensation bill to KWD11.45bn and a 64% y/y leap in subsidies to KWD4.88bn and a 21% y/y increase in the total spending category to KWD2.48bn.
e budget de cit prior to expensing obli- gations towards the FFG was down 60% y/y to KWD1.29bn, while a er deduction of amounts to be transferred to FFG the nal budget de cit narrowed by 31% y/y to KWD3.34bn.
e Fund for Future Generations is a sover- eign wealth fund entrusted with maintaining the Kuwaiti citizen’s high standard of living in a post-oil economy. Kuwait’s scal year runs from April 1 to March 31.™
serViCes
Advisor appointed for joint Iraq-Kuwait field study
iraq/KuWait
uK-BASED ERC Equipoise has been appointed by the governments of Iraq and Kuwait to carry out a study on the joint development of elds along their mutual border.
e news follows the announcement of plans for collaborative efforts on the assets by the Kuwaiti oil minister.
ERC Equipoise’s contract will run for two years and determine how the shared assets can be developed.
Kuwaiti Oil Ministry Envoy Sheikh Talal Nas- ser al-Izabi Al Sabah was quoted by Kuwait News Agency (KuNA) as saying that the deal had only come about because of six years of work between the two governments.
On the sidelines of a state visit to Baghdad by
Kuwait’s ruling emir, Sheikh Sabah al-Ahmad al-Sabah, KuNA quoted Oil Minister Khaled al-Fadhel as saying: “A joint agreement will be signed with the Iraqi party a er the Kuwait Oil Company completes a study about the produc- tion of the shared oil elds in northern Kuwait.”
Relations between the neighbours have been improving in recent years.
Indeed, in August 2018, Kuwait’s then-Oil Minister Bakheet al-Rashidi revealed that a shortlist had been drawn up of four consultants to advise on the development of the areas.
Speaking on the sidelines of the Organisa- tion of Arab Petroleum Exporting Countries (OAPEC) meeting in late December, his Iraqi counterpart Thamir Ghadhban said that a
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w w w . N E W S B A S E . c o m Week 31 06•August•2019