KUWAIT BUDGET SURPLUS ESTIMATED AT $17.5 BILLION

UNCLAS KUWAIT 000488 SIPDIS SIPDIS DEPT FOR NEA/ARP, EB E.O. 12958: N/A TAGS: ECON EFIN EPET KU SUBJECT: KUWAIT BUDGET SURPLUS ESTIMATED AT $17.5 BILLION AT END OF FY 2006-2007 ¶1. Kuwait's fiscal year ended on 31 March, with the government budget surplus estimated at $17.5 billion (approximately 15% of GDP and 50% of actual budget expenditures). Oil revenue of $51.5 billion (est.) comprised about 95% of total government revenue. The projected government deficit of $9.1 billion for fiscal year 2006-2007 had been based on a hypothetical oil price of $36 per barrel and a production level of 2.247 million barrels per day (Kuwait's OPEC quota). In fact, the average price for Kuwaiti export crude for the fiscal year was $58.40 and actual production was closer to 2.5 million barrels per day. Actual budget expenditures were about $36.7 billion, less than the $38.9 billion that the Government initially projected. This marks Kuwait's eighth consecutive year of generating a budget surplus. ¶2. For the 2007-2008 fiscal year, the Government projects $29.12 billion in estimated revenue, again based on $36-per-barrel oil produced at Kuwait's OPEC production quota, and $36.58 billion in expenditures. At this expenditure level, the break-even price for oil is about $40, assuming an average production level of 2.5 million barrels per day. Thus, the 2007-2008 budget surplus is again expected to be significant. ********************************************* * For more reporting from Embassy Kuwait, visit: http://www.state.sgov.gov/p/nea/kuwait/?cable s Visit Kuwait's Classified Website: http://www.state.sgov.gov/p/nea/kuwait/ ********************************************* * Tueller