Oil revenues up 15 percent in 8 months -- report

KUWAIT, Jan 12 (KUNA) -- The nation's" total revenues for the first 8 months of the fiscal year (April-November, 2012) reached KD 21.6 billion, on the back of soaring oil revenues," said a report by the National Bank of Kuwait (NBK).
It added that "the 15% y/y rise in oil receipts, however, is stronger than expected given a 1% decline in Kuwait Export Crude prices and a 10% increase in oil production over the same period. Non-oil revenues were also up by some 18% y/y to around KD 1.1 billion. " The report continued :" Government spending climbed to KD 6.9 billion in the 8 months to November, equivalent to one-third of the amount budgeted for the entire year. Total spending surged by KD 2.7 billion from October, with the year-on-year decline in spending slowing considerably to 3% compared to 31% at the end of the previous month. Nevertheless, a large part of the increase in spending during the month likely reflects the pick-up in reporting, rather than a fundamental acceleration in the rate of spending." The report further said that" the rise in spending came almost entirely from current expenditures, which are now down only slightly year-on-year. Current spending leapt to KD 6.3 billion in November from KD 3.8 billion at the end of the previous month. The biggest driver was the 'wages salaries' component which, after appearing weak in previous months, is now up by some 25% y/y - largely on the back of a rising Ministry of Education wage bill. " Meanwhile, capital spending continued to disappoint, reaching just under KD 0.6 billion in the 8 months to November, KD 0.1 billion lower than a year ago. Almost three-quarters of this decline was the result of reduced investment spending by the Ministry of Electricity and Water. On a brighter note, the rate of capital spending has gathered pace, reaching 22% of the full-year budget, up from 16% a month earlier. Yet this is still low in comparison to the 5-year historic average of 31% over a similar 8-month period.
" Moreover, the report indicated that their "estimate of demand-impacting spending climbed to KD 5.0 billion in November, a rise of 17% y/y. This spending excludes some transfers and other items that have minimal effect on economic activity. The strong rise indicates that fiscal policy is providing some much-needed support for the economy." The report concluded that " the data shows that reported government spending is at last gaining momentum - albeit mostly on the current spending side. With reported and actual spending likely to rise further in following months, any additional increases in the budget surplus are likely to be smaller than in the early months of the year." (end) fnk.ajs KUNA 121702 Jan 13NNNN