Thursday, Jul 02, 2009

(MORE TO FOLLOW) Dow Jones Newswires

02-07-09 1215GMT

Thursday, Jul 02, 2009

KUWAIT CITY, Kuwait (AFP)--Kuwait's parliament on Thursday approved the 2009/2010 state budget which projects a sharp drop in revenues and spending due to lower oil prices and a 4 billion dinar ($13.8 billion) deficit.

Forty lawmakers voted for the budget, 12 against and two abstained.

Revenues for the oil-rich emirate are projected at KWD8.1 billion ($27.9 billion), down 36% from $43.8 billion of budgeted income in the past fiscal year which closed on March 31.

Projected spending is slashed by a massive 36.2% to KWD12.1 billion dinars ($41.7 billion) from $65.4 billion in last fiscal year's budget.

Kuwait's fiscal year runs from April 1 to March 31.

The budget was enacted in a decree by the emir in March after parliament was dissolved. Under law, the new parliament has the power to approve or reject the budget decree.

The main drop in the budget is in oil, income which contributes more than 90% to total revenues, due to the sharp decline in oil prices.

Projected oil revenues were calculated on the basis of an oil price of $35 a barrel, down from last year's $50 a barrel.

The main expenditure cutback is the cancellation of a $19.08 billion one-off payment to the social security agency, while 24% is slashed from capital spending, according to the budget decree.

(END) Dow Jones Newswires

02-07-09 1223GMT