Kuwait inflation is expected to slow down to around 4 percent in 2012, Global Investment House said Monday. Inflation rates in recent times have come down and for the month of February 2012 stood at 3.8 percent versus 5.3 percent in the same month last year. With pressure from international food and commodity prices expected to ease in coming months and a cautious domestic credit growth, inflation is expected to come down in the near term. For 2012, IMF projects Kuwait's inflation to slow down to 3.4 percent while EIU estimates it to come down to 4.4 percent. Moreover, buoyed by high oil prices and increased oil production, Kuwait's real GDP in 2011 is expected to have grown by 5.7 percent, IMF forecast. Nominal GDP is expected to have grown by 29 percent. However, due to the political situation, development plans did not show the planned progress and capital expenditures were below budgeted figures. Consequently, non-oil growth witnessed subdued progress and limited economic diversification for the economy. For 2012, IMF estimates, Kuwait's real GDP to grow by 4.5 percent on further increase in oil production and increased government spending. Based on available data, Kuwait's total government revenue is expected to reach KWD29.5 billion for 2011/12 while expenses even if they touch the usually budgeted high figure of KWD19.4 billion will amount to a budget surplus of KWD10.1 billion. Total expenditures increased by 44 percent in 2010/11 to reach KWD16.2 billion. Current expenditure, which includes wages & salaries and transfer payments, is the largest contributor and represented 70 percent of total expenditures in 2010. Current expenditures jumped by 40 percent in 2010/11 to reach KWD11.3 billion from KWD8.1 billion in 2009/10. In terms of capital expenditures, miscellaneous expenditure almost doubled in 2010/11 to reach KWD3.05 billion, while construction & land acquisition increased by 56 percent to reach KWD1.7 billion. Transport & equipment expenditure, however, declined by 32 percent in 2010/11 and stood at KWD153 million. Despite the substantial rise in government expenditures, higher oil revenues allowed Kuwait to maintain a budget surplus in 2010/11. After the Reserve for Future Generations (RFFG), the budget surplus for 2010/11 was a healthy KWD3.1 billion, compared to KWD4.7 billion in 2009/10.
