The Kuwait cabinet on 8 October approved the budget for fiscal year 2012-13, which starts on 1 April, with total revenue projected at KD13.932bn ($49.60bn), up 3.6% from KD13.445bn ($47.86bn) in 2011-12 and total expenditure of KD21.240bn ($75.61bn), up 9.3% from KD19.435bn ($69.19bn) in the previous year. The resulting deficit in 2012-13 stands at KD10.791bn ($38.42bn) after allocation of 25% of total revenue to the Reserve Fund for Future Generations (RFFG), up 47.1% from the estimated deficit of KD7.335bn ($26.18bn) in 2011-12, which includes an allocation of 10% only of total revenue the RFFG. Last month the Kuwaiti cabinet raised the mandatory allocation to the RFFG from 10% to 25% in a bid to encourage savings, Kuwait’s Minister of Finance Nayif al-Hajraf said (MEES, 21 September).

The budget estimates announced by the cabinet did not include a figure for the oil price assumption, nor one for oil revenue, which is usually over 90% of total revenue. But an earlier version of the draft budget for 2012-13 released in March indicated that oil revenue will be based on $65/B in 2012-13, up from $60/B the previous year (MEES, 26 March). With actual market oil prices higher than the conservative $65/B price and a tendency to under-spend its allocations, Kuwait is likely to end up with a sizeable surplus in fiscal 2012-13 instead of a projected deficit, as was the case in all the years since 2000. According to statistics on the closed accounts from the ministry of finance, Kuwait realized a budget surplus of KD10.205bn ($36.33bn) in 2011-12 instead of the projected deficit of KD7.335bn ($26.18bn). (CONTINUED - 335 WORDS)