Quotes: 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.

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
 Nov 29 2015 - Middle East ready for increase in air passenger trafficMENAFN
(MENAFN) The UAE, Qatar, Saudi Arabia, Egypt and Jordan are ready to accomplish a strong 4.9 percent growth in air passenger traffic.The gulf nations will all enjoy strong increase of 5.6 percent, ...

 Nov 29 2015 - MSM Index Drops 127 Points Last WeekQatar News Agency
(MENAFN - Qatar News Agency) Muscat Security Market (MSM) index closed at 5668 points, down by 127 points, constituting 2.2%, down for the fourth consecutive week. The sectoral indices declined, ...

 Nov 29 2015 - German State Aims for 4 Billion-Euro Exports to Saudi Arabia by 2020Qatar News Agency
(MENAFN - Qatar News Agency) The German State of Baden-Wurttemberg will strive to attain over 4 billion euros exports to the Kingdom of Saudi Arabia by 2020, a goal that will double the current ...

 Nov 29 2015 - UAE, Jordan Sign MoU to Enhance Joint Efforts in SMEs and InnovationQatar News Agency
(MENAFN - Qatar News Agency) The UAE Ministry of Economy and the Jordanian Ministry of Industry, Trade and Supplies, have signed a Memorandum of Understanding to increase cooperation between the two ...

 Nov 29 2015 - Militias Fighting Kills 19 in SomaliaQatar News Agency
(MENAFN - Qatar News Agency) At least 19 people were killed Saturday in fighting between rival militias in central Somalia, officials and residents said. The fatalities in the town of Galkayo ...

 Nov 29 2015 - Clashes Erupted between Police and Migrants on Greece-Macedonia BorderQatar News Agency
(MENAFN - Qatar News Agency) Clashes between riot police and migrants angry at being prevented from entering Macedonia from Greece have left up to 40 people injured. Macedonian soldiers raised a new ...

 Nov 29 2015 - Palestinian Shot Dead after Alleged Stabbing AttackQatar News Agency
(MENAFN - Qatar News Agency) A Palestinian was shot dead early Sunday by Israeli soldiers at the entrance of the old city of Jerusalem after allegedly stabbing and injuring an Israeli police . The ...

 Nov 29 2015 - Jordan's Border Guards Receive 51 Syrian RefugeesQatar News Agency
(MENAFN - Qatar News Agency) A total of 51 Syrian refugees from various age groups, entered into the Kingdom of Jordan through various crossing points during the last 72 hours. The Jordanian border ...

 Nov 29 2015 - Qatar- Economy Ministry Recalls 2011-2014 Models of Several Car BrandsQatar News Agency
(MENAFN - Qatar News Agency) The Ministry of Economy and Commerce has announced the recall of 2011-2014 models of Dodge, Chrysler, Jeep, Charger, Challenger 300c and Grand Cherokee, due to a ...

 Nov 29 2015 - Qatargas Shipping Department Wins Prestigious British Safety Council AwardsQatar News Agency
(MENAFN - Qatar News Agency) For the second consecutive year, Qatargas' Shipping Department has won two prestigious awards from the British Safety Council for its commitment to achieving excellent ...




Internatinal Property Show


Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  

Middle East North Africa - Financial Network

Main News
News By Industry
News By Country

Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices


Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks

Saudi Arabia 

Economic Calendar
Financial Glossary

Financial Calculators

RSS Feeds [XML]

Corporate Monitor


Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters

© 2014 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help