Gulf Daily News - 30/3/2006

Kuwait eyes a budget surplus of up to KD7 billion ($23.9bn) in the year to March 31 and is due to get another substantial surplus the next year thanks to high oil prices, a leading bank said.

Revising its forecasts up a tad, National Bank of Kuwait (NBK) said Kuwait was likely to earn KD13.75bn to KD13.82bn from crude oil exports - based on an estimated barrel price of $51.2 to $51.5.

"Assuming that actual expenditures come in between 94 per cent and 97pc of the budget's projection, the government could reap a surplus of between KD6.7bn and KD7bn,' NBK said in a report.

It said the figures did not take account of a mandatory 10pc allocation to a state reserve fund. The bank had forecast in February a surplus of KD6.95bn for the current budget year.

'The outlook for ... 2006/07 is also shaping up positively. NBK's price forecasts still see high oil prices in the range of $44 to $61,' the report said.

The report said the budget was expected to see a surplus of KD2.7bn to KD7bn, excluding a KD2bn contribution to a social security body.

The budget is calculated on an average $21 per barrel and oil accounts for up to 90pc of state revenue in the Opec producer which controls nearly a tenth of global petroleum reserves.