Oil Revenue Surge Seen Cutting Kuwait Deficit: Investors’ GuideBy , , and
Budget in 2017-2018 is based on oil price of $45 per barrel
Oil revenue seen rising 36 percent to 11.7 billion dinars
Kuwait expects oil revenue to surge more than 30 percent in the fiscal year that starts in April, reducing the budget deficit.
The government released details of the budget late on Monday, in addition to broad elements of a plan to revamp the economy and reduce its reliance on crude exports. Below is a summary of the main points presented by Deputy Prime Minister Anas Al Saleh.
- 2017/18 budget based on oil price of $45 per barrel, compared with $35 used in 2016/17 budget; Kuwait sees oil price at $55 to $60 this year
- Output in 2017/18 expected at 2.8 million barrels per day; unchanged from 2016/17
- Plans to boost oil production to 4 million barrels per day by 2020, and invest to maintain that level until 2040
- The budget deficit, including spending on Future Generations Fund (part of Kuwait’s sovereign wealth fund), seen at 7.9 billion dinars ($25.9 billion) in 2017/18, compared with 9.7 billion dinars in 2016/17 budget. The deficit was 6 billion dinars in 2015/16
- Excluding FGF, deficit seen at 6.6 billion dinars in 2017/18, compared with 8.7 billion dinars in 2016/17 budget
- Total spending (including FGF) seen at 21.2 billion dinars in 2017/18 versus 19.9 billion dinars in 2016/17. Total spending was 19.6 billion dinars in 2015/16
- Funds allocated to FGF to reach 1.3 billion dinars in 2017/18, up from 1 billion dinars in 2016/17. It was 1.4 billion dinars in 2015/16
- Budget allocates 10.8 billion dinars for wages, 3.1 billion dinars for subsidies
- 2017/18 revenue estimated at 13.3 billion dinars versus 10.2 billion dinars in 2016/17 and 13.6 billion dinars in 2015/16
- Oil revenue expected to be 36 percent higher at 11.7 billion dinars in 2017/18. Oil generated 12.1 billion dinars in revenue in 2015/16
- Capital spending to reach 3.4 billion dinars in 2017/18
- Plan to boost investment in petrochemicals, refining to create jobs
- Kuwait to list power-generating company in 2017; 50 percent stake will be sold to Kuwaiti citizens
- Plans three new power generating companies in partnership with private sector
- Targets 15 percent of electricity from renewable sources by 2030
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