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by Ali Nehme
Publicis Media Middle East


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Dubai plans small 2017 budget deficit as it boosts infrastructure spending

December 22, 2016 11:14 am


* Emirate plans to post deficit of AED2.5bn

* In run-up to Expo 2020, Dubai is extending metro system, expanding airports and road network, and building other infrastructure

* Total state spending will rise to AED47.3bn next year from AED46.1bn originally planned for 2016 budget

Dubai plans to post a small budget deficit next year of AED2.5 billion ($681 million), or 0.6 per cent of gross domestic product, as it sharply raises spending on infrastructure, the government said on Wednesday.

Expo 2020 boost

The emirate is extending its metro system, expanding its airports and road network, and building other infrastructure as it gears up to host the Expo 2020 world’s fair.

Total state spending will rise to AED47.3bn next year from AED46.1bn originally planned for the 2016 budget. Infrastructure spending is to jump 27 per cent to reach 17 per cent of total expenditure.

The projected three  per cent rise in total spending marks a sharp slowdown from the 2016 budget, in which spending increased 12 percent, and a nine percent rise in 2015.

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Drop in revenue

Revenues are projected to fall to roughly AED44.8bn from AED46.1bn but that is partly due to technical changes to the way items are classified, and the government expects income from fees for government services, which provide 76 per cent of total revenues, to rise by six per cent because of economic growth, it said.

Despite the overall budget deficit, the government expects to run an operating surplus – excluding items such as loan repayments and capital receipts – of AED2.9bn next year.

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AMEinfo EXPERTS
by Ali Nehme
Publicis Media Middle East


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