UAE budget in numbers- Balancing a vision requires deficit spending
Dubai was not just balancing a budget when it announced $15.5 bn in expenditures for 2019, but also a vision built on socio-economic bases that afforded real opportunities for growth.
Dubai’s 2019 budget, approved by Sheikh Mohammed, Ruler of Dubai, showed a marginal increase on last year’s AED56.6bn ($15.4bn), with investment for the upcoming Expo 2020 again headlining spending, with AED9.2bn ($2.5bn) allocated for overall infrastructure cost.
A substantial allocation towards health, education, and housing will further improve the standards of living, according to KhaleejTimes (KT).
“Dubai’s 2019 budget with a focus on infrastructure and social development as well as job creation will accelerate economic activities and strengthen the emirate’s position as one of the most preferred destinations for global businesses,” KT said quoting analysts.
In 2019, Dubai will continue Social Benefits Fund and supporting families, with the aim of making the emirate one of the most liveable cities in the world, according to KT.
Keeping its vision intact, education, healthcare and housing budgets garnered 33% of the total budget.
“The 2019 budget projects a deficit of AED5.8 billion ($1.58 bn), down slightly from the projected 2018 deficit of AED6.2 billion ($1.68bn),” Reuters said.
Numbers that matter
Dubai expects to generate $13.8bn (AED 51bn) in public revenues, an increase of 1.2% over the fiscal year 2018, which according to Reuters included a 12% jump in revenues.
Non-tax revenues account for 64% of total revenues, while taxes account for 25%, and revenues from government investments represent 3%.
“Dubai expects to almost halt the growth of state spending this year as revenues expand more slowly because of the emirate’s efforts to stimulate business investment,” Reuters said based on the 2019 state budget released on Tuesday.
Reuters added that in 2018, budgeted infrastructure spending shot up by close to 50%, to AED11.9 billion ($3.24bn), as Dubai made preparations to host the Expo 2020 world’s fair.
Abdulrahman Saleh Al Saleh, Director General of DIFC, said Dubai achieved an operating surplus of AED850 million ($232 million) in 2018 due to the adoption of disciplined fiscal policies.
KT reported Dr. Hadi Shahid, managing partner, Alliott Hadi Shahid Chartered Accountants, saying infrastructure spending will accelerate economic activities and help generate more employment opportunities.
“… good news that almost 2,500 new jobs will be created,” he said adding: “Given vibrant activities in all sectors of the economy, 2019 seems to be a better year.”
Oil revenues account for 8% of total projected revenues for the fiscal year.
Salary and wage allowances within the budget account for 32% of total government spending.
Public and administrative expenditure, as well as grant and support expenditure, account for 47% of total government expenditure, a 5% year-on-year growth.
The government will spend 22% on security, justice, and safety.