Quotes: US MENA   Enter Symbol: NewsLetter: Search: advanced

Kuwait- Govt spending sees strong pick-up in H1 of FY2013/14  Join our daily free Newsletter

MENAFN - Arab Times - 05/01/2014
No. of Ratings : 0
Add to Mixx!



(MENAFN - Arab Times) The recently released public finance figures for the second quarter of fiscal year 2013/14 (July to September) reveal a substantial pick-up in government spending.

After a weak first quarter - partly related to the delay in approving the budget - reported government spending surged, driven almost entirely by current expenditures rather than investments.

We expect to see a pick-up in capital spending in the second half of FY2013/14, although overall government spending growth is likely to be more subdued than last year.

Total government spending reached KD 5.1 billion in the first half of the fiscal year - about KD 1.7 billion higher than a year ago.

This came on the back of a rise in current expenditures, driven by two main factors.

First, the large 'miscellaneous & transfers' segment, which incorporates items such as military salaries and transfers to the social security fund, was up by a huge KD 1.1 billion y/y.

Plans
Second, spending on wages and salaries, which constitute one-quarter of total spending, saw a KD 0.8 billion y/y rise.

In part, both of these changes may reflect payment timing issues rather than a change in underlying spending policy.

(Large increases were not factored into the annual budget plans, for example.)

If so, large increases should smooth-out by year-end.

Also in current expenditures, spending on 'goods & services' declined by KD 0.2 billion y/y.

The segment's contribution to current expenditures fell to 14% from 29% in the same period of the previous year.

The drop is likely attributed to a fall in the cost of purchasing fuel from local refineries, in order to supply power and electricity generation stations.

Meanwhile, capital spending recovered somewhat in the second quarter after a weak start, rising 9% y/y in 1H 2013/14 to KD 0.4 billion.

Sluggish project implementation has kept the rate of capital spending at 60-70% of the full-year budget over the past two years. But with investment expenditures budgeted to dip in FY 2013/14, and an expected improvement in project execution, the rate of capital spending could see a marked rise this year.

In total, the level of overall recorded government expenditure reached its highest at this stage of the year in five years.

Still, it is worth noting that the rate of spending, at 24% of the full year budget, is more or less in line with its historic average.

But perhaps more importantly, the macroeconomic implications of the latest spending figures are difficult to assess.

A large part of the pick-up in spending came from the 'miscellaneous & transfers' segment, which incorporates certain intergovernmental transfers that do not affect the level of demand in the economy (i.e. are not actual "spending").

Since line-by-line spending details have not yet been released we cannot definitively isolate this impact.

But if we strip out the 'miscellaneous & transfers' segment entirely, overall spending rose by a very robust 34% y/y in 1H 2013/14.

Again, however, this may be affected by timing issues and we expect growth in spending to moderate significantly by year-end.

Total government revenues reached KD 15.8 billion in the six months to September, down slightly from last year on lower oil prices.

Oil revenues reached KD 15.0 billion, with the impact of a 3% y/y decline in oil prices only slightly offset by a small expansion in production.

While oil prices are likely to remain elevated, an expected cut in production during the second half of the year - in response to weaker global demand and rising oil supplies elsewhere - should keep revenues below last year's record levels.

Meanwhile, non-oil revenues increased by a strong 34% y/y to KD 0.9 billion on higher miscellaneous revenues and fees, likely linked to UN compensation payments.

The budget surplus reached KD 10.7 billion in the first half of FY 2013/14, equivalent to about one-fifth of annual forecast 2013 GDP.

Further increases in the surplus this year are likely to more limited, since spending typically surges in the second half of each year due to reporting issues.

Nevertheless, Kuwait's fiscal position is likely to remain strong.

We project a budget surplus for FY2013/14 of around KD 11 billion.

This is equivalent to some 22% of GDP - slightly below the 25% recorded last year, but still an extremely robust figure.

 


Arab Times




  MENA News Headlines
 Oct 1 2014 - Japan volcano death toll hits 43 as new bodies foundKhaleej Times
(MENAFN - Khaleej Times) Rescuers found seven more people in cardiac arrest near the mountain top and are now carrying them down an official in Otaki village where one mountain trail begins told ...

 Oct 1 2014 - Shahid Kapoor and Shraddha Kapoor speak about their film 'Haider'Khaleej Times
(MENAFN - Khaleej Times) Vishals fascination with Shakespeare is undeniable. Shahid Kapoor was not sure whose coffee he was having while he sat on the couch with City Times during his recent trip to ...

 Oct 1 2014 - Newlyweds set to officialise perfect weddingKhaleej Times
(MENAFN - Khaleej Times) Newlyweds George Clooney and Amal Alamuddin were expected to hold a civil service at Venice town hall yesterday to officialise their star-studded more than perfect ...

 Oct 1 2014 - Qatar Stocks Gain SlightlyQatar News Agency
(MENAFN - QNA) Qatar Exchange index gained slightly by 30.24 points (+0.22%) when the bourse closed trading at 13,758.55 points here Wednesday. The trading value dropped to QR 613.628 million from ...

 Oct 1 2014 - QAPCO, Education Above All Sign Partnership AgreementQatar News Agency
(MENAFN - QNA) Qatar Petrochemical Company (QAPCO) and Education Above All Foundation (EAA) on Wednesday signed a partnership agreement, according to which QAPCO joins the international partners and ...

 Oct 1 2014 - Qatar's Hajj Mission Participates in GCC Annual Mission MeetingQatar News Agency
(MENAFN - QNA) Qatar's Hajj mission took part in the annual meeting for heads of GCC Hajj missions that was held Tuesday night at the headquarters of the Bahraini mission in Mecca. The meeting ...

 Oct 1 2014 - Alia Bhatt turns designerKhaleej Times
(MENAFN - Khaleej Times) Says director Karan Johar influences her fashion sense Photo: Agencies Alia Bhatt has turned designer for a line titled ‘Alia’ for an online shopping portal. ...

 Oct 1 2014 - Al Ain bow out in style in AFC Champions LeagueKhaleej Times
(MENAFN - Khaleej Times) The Boss exit despite beating Al Hilal by odd goal in three in AFC Champions Dubai: Ten-man Al Ain beat Saudi Arabia’s Al Hilal 2-1 in the second leg of the AFC ...

 Oct 1 2014 - Justin Rose aims for the skies in charity bidKhaleej Times
(MENAFN - Khaleej Times) Rose was set a task of hitting a succession of golf balls at a target 180 yards away from his elevated perch on the planes wing which has a wingspan of 64 metres. Golfer ...

 Oct 1 2014 - Aussies likely to miss services of three key playersKhaleej Times
(MENAFN - Khaleej Times) Glenn Maxwell Cameron Boyce and Pat Cummins may not be included in the team if they play the final of the Champions League T20 in India. Your browser does not support ...

more...


 






Google

Click to Apply

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country

IPO News
Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

US Markets Details

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Investment Game
Economic Calendar
Financial Glossary

My MENAFN
Portfolio Tracker

Voting

Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2000 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help