US embassy cable - 05KUWAIT2991

UNCLAS KUWAIT 002991 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON, EFIN, EPET, PGOV, KU 
SUBJECT: KUWAIT'S BUDGET: THE NEW MATH 
 
 
1. Minister of Finance Bader Mishari Al-Humaidhi reported to 
local papers on July 3 that Kuwait posted a KD3.2 billion 
($11 billion) surplus for the 2004/2005 (1 April - 31 March) 
fiscal year.  Income for Kuwait was almost three times higher 
than the original budget projections made last year. 
Approximately 91 per cent of the GOK's income is from oil 
revenues.  The 2004/2005 Kuwait budget calculated income 
based on a $15/barrel price estimate.  Actual income from oil 
sales for the year was $27.8 billion on an average actual 
price of $35.50 per barrel.  This is the sixth consecutive 
year that Kuwait has posted a budget surplus. 
 
2. On June 29, Kuwait's National Assembly passed the state 
budget for Kuwait's fiscal year 2005/2006.  The new budget 
projects a 2.6 billion KD deficit ($10.5 billion), with an 
expected income of KD4.6 billion and expenses of KD7.2 
billion.  However, Kuwait is estimating its oil revenue to be 
only KD3.9 billion based on a very conservative $21/barrel 
sale price for the fiscal year.  With Kuwait export crude 
currently selling at an all-time high of $49/barrel and 
production reaching 2.7 million bpd, local economic reports 
have forecast a surplus in revenue of over KD5 billion by the 
end of the year.  Should that prove correct, Kuwait will have 
seven consecutive years of budget surplus. 
 
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TUELLER