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Kuwait’s fiscal deficit narrowed to 3bn dinars ($9.8bn) in the year through March, a drop of more than 72% on the previous year as oil prices recovered.The Opec member recorded the highest non-oil revenue in seven years, up 38.5% to 2.4bn dinars, according to a Ministry of Finance statement on Sunday. Oil revenue surged 84.5% to 16.2bn dinars.Years of political tensions have thwarted Kuwait’s fiscal reforms and stymied efforts to diversify the oil-reliant economy and promote foreign investment.The country hasn’t been to the market since a debut Eurobond in 2017. Lawmakers have said the government should better manage its finances before resorting to debt.“Naturally, the rebounding oil price in the second half of the fiscal year helped shore up Kuwait’s revenue,” said Finance Minister Abdulwahab al-Rasheed. “Kuwait has one of the strongest sovereign balance sheets in the world, with one of the lowest sovereign debt to GDP levels globally, and a strong rebounding economy.”Other highlights:n Total income for the year through March rose 76.9% to 18.6bn dinars, while spending was 21.6bn dinars.n Salaries and subsidies in the 2021-22 fiscal year accounted for 76% of spending, at 16.4bn dinars.n 12% of expenses, or 2.6bn dinars, was on capital expenditure. The average price of Kuwaiti crude in the period was $80.7 a barrel.A 10% transfer of total revenues to the FGF didn’t take place in line with a law passed by parliament in 2020 to halt such transfers in years of deficit.Kuwait has projected the country’s smallest deficit in nine years for the current fiscal year, which started April 1, due to higher oil prices. Spending is estimated at 23.53bn dinars and revenue at 23.40bn dinars. Oil income this year is based on a projected average price of $80 a barrel.Issuing debt or withdrawing from the FGF “will implicate more than half of the country’s citizens, who are under 24 years old, to bear the burden of paying those debts or the gradual depletion of what is supposed to be reserved for future generations,” Kuwait-based Al-Shall Economic Consultants said in a report yesterday.“The increase in public expenditures in the future will be nothing but an increase in current expenditures, which are driven by inflation, depriving the current generation to benefit from those expenditures as they are not spent on improving education, housing, health or projects that provide sustainable job opportunities,” Al-Shall said.

Saudi Arabia has cut oil exports sharply this month as the kingdom delivers on an Opec+ agreement to shore up global crude markets.Saudi shipments were down by about 430,000 barrels a day, or roughly 6%, by mid-November compared with the previous month, according to data from energy analytics firm Kpler Ltd. An even bigger slump of 676,000 barrels a day was observed by another consultant, Vortexa Ltd.The kingdom, which leads the Organisation of Petroleum Exporting Countries, is fully committed to the agreement struck last month between the group and its allies, according to an official who asked not to be identified.“Saudi Arabia is cutting a lot, going down for a second straight month,” said Viktor Katona, an analyst at Kpler in Vienna.US President Joe Biden slammed Riyadh and its partners last month, saying the hefty 2mn barrel-a-day cut would endanger the global economy and aid fellow Opec+ member Russia in its war in Ukraine, though oil-market trends have since given the decision some vindication. Crude prices have retreated about 4% this week to near $90 a barrel amid a fragile backdrop for demand.Saudi Energy Minister Prince Abdulaziz bin Salman defended the cutbacks last week at the COP27 climate talks in Egypt, saying they were needed to offset extreme economic uncertainties. He said the group would remain “cautious.” The kingdom has often sought to lead Opec+ by example, swiftly delivering its pledged curbs – or even exceeding them – to encourage other members to follow.Exports from Opec’s 13 members are down “very significantly in the first half of November, by more than 1 million barrels a day,” said Daniel Gerber, chief executive officer of tanker-tracker Petro-Logistics SA in Geneva.While an uptick is likely in the second half of the month, flows are on track for an average monthly drop of 1 million a day – roughly equivalent to the group’s full pledged reduction, according to the firm, which has monitored tanker traffic for four decades.Among Saudi Arabia’s Opec counterparts in the Middle East, signs of cuts were more mixed, though shipping data for the first half of the month can give a fragmentary picture, prone to distortion if cargo loadings fall just inside or outside the date range.Iraq showed a drop of 308,000 barrels a day, or about 9%, in shipments in the first two weeks of November and Kuwait’s flows appeared broadly flat, but exports from the United Arab Emirates rose by 379,000 barrels a day, or roughly 12%, according to Kpler.Shipments from the UAE are usually concentrated at the beginning of the month and subside later in the period, Bloomberg tanker-tracking indicates. The country’s Energy Ministry and state-run producer Adnoc didn’t immediately respond to requests for comment. Abu Dhabi has in the past been more eager to deploy the new production capacity it’s invested in than curtail supplies, triggering a dispute last year that almost splintered the Opec+ alliance.Some Opec+ delegates have privately said that Abu Dhabi didn’t initially support the group’s cutbacks, though others have disputed the claim, and UAE Energy Minister Suhail al-Mazrouei said last month that the decision was the right one.The full 23-nation Opec+ alliance will meet to consider production policy for early 2023 on December 4 in Vienna.

The future of Twitter seemed to hang in the balance on Friday after its offices were locked down and key employees announced their departures in defiance of an ultimatum from new owner Elon Musk.Fears grew that a fresh exodus would threaten the very existence of one of the world’s most influential internet platforms, which serves as a key communication tool for the world’s media, politicians, companies, activists and celebrities.According to ex-employees and US media, hundreds of employees chose “no” to Musk’s demand that they either be “extremely hardcore” or leave the company.“So my friends are gone, the vision is murky, there is a storm coming and no financial upside. What would you do?” tweeted Peter Clowes, who refused Musk’s final warning.Musk, also the CEO of Tesla and SpaceX, has come under fire for radical changes at the California-based firm, which he bought less than a month ago for $44bn.He had already fired half of Twitter’s 7,500 staff, scrapped a work-from-home policy and imposed long hours, all while his attempts to overhaul the company faced backlash and delays. His stumbling attempts to revamp user verification with a controversial subscription service led to a slew of fake accounts and pranks, and prompted major advertisers to step away from the platform.On Friday, Musk appeared to be pressing on with his plans and reinstated previously banned accounts, including that of comedian Kathy Griffin, which had been taken down after she impersonated him on the site.Musk did not immediately welcome back former US president Donald Trump, saying the “decision has not yet been made” on the return of the ex-leader. Trump was banned for inciting last year’s attack on the Capitol by a mob seeking to overturn the results of the 2020 US election. But hours later, Musk posted a poll to Twitter asking users to vote “yes” or “no” on whether to “Reinstate former president Trump,” though there was no clear indication that he would adhere to the results of the ad hoc survey.Musk has done similar polls in the past, asking followers last year if he should sell stock in his electric car company Tesla. Fevered talk of the site’s imminent demise was driving record-high engagement on Twitter, according to Musk.In a tweet, the South African-born billionaire said: “Record numbers of users are logging in to see if Twitter is dead, ironically making it more alive than ever!”Musk added that the “best people are staying, so I’m not super worried.”Despite Musk’s assurances, entry to Twitter’s offices was temporarily closed until Monday, even with a badge, according to an internal message seen on US media.

Wall Street’s biggest banks agree the Federal Reserve will hike US interest rates further into next year, but are at odds over how high it will take them and whether it will be cutting by the end of 2023.In a reflection of how tough Chair Jerome Powell’s job is becoming, leading economists are split over whether the central bank will need to keep attacking stubbornly high inflation or if the risks of recession and rising unemployment will become bigger concerns.While there is a broad consensus in predicting the Fed will raise its benchmark rate by 50 basis points to a range of 4.25-4.5% in December and then to around 5% by March, that is where agreement over the outlook ends:Economists at UBS Group AG see 175 basis points of cuts next year and Deutsche Bank AG predict a percentage point of reductions late in 2023.Nomura Holdings Inc projects hikes to 5.75% before a retreat to 5%, while Barclays Plc see 75 basis points of cuts in the final four months of the year.Morgan Stanley, which sees the peak at 4.75%, and Bank of America look for a quarter point cut in December.Goldman Sachs Group Inc and Wells Fargo & Co anticipate rates peaking at 5.25% and remain there through the rest of the year, while JPMorgan Chase & Co reckons rates will hit 5% and stick there until 2024.Citigroup Inc sees a peak range of 5.25-5.5% hit by mid-2023, and holding there through the rest of the year.“Chair Powell has been pretty clear in his communications that the committee has learned one key lesson of the ’70s, which is not to loosen rates prematurely even in the midst of a recession. The most compelling reason for Fed to cut rates in 2023 is if inflation falls below 3%. That’s not our modal forecast. Indeed our inflation forecast sees 68% chance of inflation between 3% and -5% next year,” says Anna Wong, chief US economist at Bloomberg. “Given the uncertainties at play it is understandable that the range of forecasts is so wide,” said Jonathan Millar, a senior economist at Barclays in New York.Although Powell and his colleagues now sound resolute in signalling they will maintain tight monetary policy to return inflation to their 2% target, from 6.2% in September and 7% in June, Millar said he does “not view that intention as credible in our baseline scenario where inflation comes down rapidly and the economy goes into recession.”In markets, the Fed is seen raising rates by a half point in December, in line with the economists’ view, with rates peaking near 5% by March with half a percentage point of cuts priced in by December 2023.Nomura sees the loftiest peak, anticipating the need to fight inflation will force the benchmark in May to 5.75%, which would be the highest since 2001.UBS is looking for the sharpest policy pivot as it bets on the economy suffering a “hard landing” with unemployment rising to above 5% in 2024.Its economists note that historically the Fed has changed tack quite quickly once outright job losses are recorded, with the median gap between rates peaking and being cut sitting at just 4.5 months.In 1984, for example, Chair Paul Volcker’s Fed U-turned in six weeks, going from rapid tightening to over 500 basis points of rate cuts. In 1989, Chair Alan Greenspan kept the federal funds rate at its high for just three weeks, before starting a reduction cycle of almost 700 basis points, while he waited 23 weeks to ease in 1995.Much depends on the labour market creaking. Bank of America Corp analysts say that in the past 16 rate hiking cycles since 1954, average unemployment when the Fed hiked for the last time was 5.7%. It was 3.7% in October.Deutsche Bank, one of the first to predict a recession, is also looking for a switch in the face of a contraction in which unemployment hits 5.5% and inflation falls to a little over 3%.Of course, forecasting is dicey work. As recently as January, most economists thought the Fed would be much less aggressive than it has been, according to a survey. Some Fed watchers are now persuaded the Fed’s hawkishness will persist alongside inflation, though partly because they bet the economy may hold up surprisingly well despite the central banks constraint.Goldman Sachs economists led by Jan Hatzius said this week that they now reckon the Fed will lift its benchmark to 5.25% and stay there through the end of next year. Wells Fargo has the same outlook. “Too much easing too soon could interfere with the Fed’s efforts to keep growth below potential until inflation is clearly on its way back to target,” the Goldman Sachs economists said.They previously said they see a “very plausible” path for the economy to avoid a recession, which also means inflation could be stickier than the Fed wants. They see a 35% chance of a recession in 2023 compared to the 65% probability assigned by the consensus of economists surveyed by Bloomberg.Morgan Stanley is expecting the Fed to only start easing in December by a quarter point after a year in which the economy just misses a recession. “Still-high inflation keeps the Fed on hold for an extended period,” economists led by Ellen Zentner said in report this week.Having been wrong-footed by the inflation surge, Fed leaders began hiking rates from near zero in March and moved by 75 basis points at their last four meetings, delivering the most aggressive restriction of policy since the 1980s. They now consistently say they see stable prices as a precondition to protecting the labour market in the future even if that means job losses and weaker growth in the short-run.“The record shows that if you postpone that, the delay is only likely to lead to more pain,” Powell said September 21.Analysts at Piper Sandler & Co this week told clients the Fed would need to see a majority of five developments before it could pivot:Inflation excluding food and energy moving credibly toward 2%; declining price expectations; tighter financial conditions; a significant weakening in the labour market; and more time for policy to have an effect.“This cycle started in March of this year - only eight months ago,” Piper Sandler’s Roberto Perli and Benson Durham said in a report. “Most likely, it won’t be much sooner than March 2023 that the Fed can have a good idea of whether the recent tightening has been enough to curb inflation.”