(MENAFN - Arab Times) Kuwait's trade surplus edged marginally higher to KD 6.6 billion in 3Q12, but remained below the KD 7.2 billion record-high registered in the first quarter. (Chart 1.) The 3Q surplus, estimated at 13% of annual 2012 GDP, was helped by a combination of still-strong oil exports and weak imports. Going forward, we expect any increases in the surplus to be limited by lower oil prices and a pick-up in imports driven by non-oil sector growth.
Oil export revenues edged up slightly to KD 7.8 billion in 3Q12, from KD 7.7 billion in the previous quarter. (Chart 2.) Year-on-year, oil exports were up by some 13%.
This is stronger than expected given a 9% increase in crude production and a 0.3% decline in Kuwait Export Crude prices over the same period. This year, oil export receipts are seen declining as oil markets and prices are expected to weaken.
Non-oil exports fell slightly by KD 0.1 billion to KD 0.5 billion in 3Q12. (Chart 3.) This was driven by lower receipts from re-exports, which more than offset improved exports of ethylene products, manufactured fertilizers and other non-oil exports. Year-on-year, however, non-oil exports were up by 13% on the back of higher export receipts from ethylene products.
Meanwhile, imports continued to slip, dipping below KD 1.8 billion in 3Q12, down from an all-time high of KD 2.0 billion in 4Q11. (Chart 4.) Yearly growth in imports also slowed to 2% in the third quarter - the lowest rate seen in almost three years. Weakness in imports may be reflective of domestic economic activity. Nevertheless, imports could pick-up this year as the government pushes forward with implementation of its development plan.