Complex Made Simple

Dubai passes an expansionary budget

AED46.1bn budget expects to show an operating surplus of AED3.4bn

Despite a slowing economy, Dubai has passed its budget for 2016, increasing expenditure by 12 per cent over 2015’s AED41 billion figure. Last year, the rate of increase in expenditure was only nine per cent.

The AED46.1bn budget expects to show an operating surplus of AED3.4bn and, with revenues also showing a 12 per cent increase (coming in at AED46.1bn), the budget will move beyond a deficit for two consecutive years.

The deficit was envisaged at AED882 million in 2014 and AED1.5bn during 2013, but last year’s budget had broken even and eliminated the gap.

“The break-even point between government revenues and expenditures has come as a result of strict financial policies of the Supreme Fiscal Committee, chaired by His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman of the Committee,” said Abdulrahman Saleh Al Saleh, Director General of Government of Dubai’s Department of Finance.


A break-up of revenue receipts in this year’s budget shows a 12 per cent increase in revenue from government services (fines and fees), which represents 74 per cent of total government revenue. This is a slower growth over that in 2015, when the increase was 22 per cent.

“This increase is due to the remarkable real economic growth by 2015 budget, with limited increments on certain government services and other increments designed to regulate the real estate market,” the government release said.

Taxes meanwhile represent 19 per cent of total government revenue while oil accounts for only six per cent of government revenue, which has on a net level “decreased significantly due to the oil global low prices”.


On the expenditure side, wages and salaries represent 36 per cent of total government spending, a one per cent decrease over the previous year. The government will, however, create 3,000 new jobs for citizens in 2016.

Meanwhile, general and administrative expenses, capital expenditures and grants and subsidies account for 45 per cent of total government spending in 2016, while infrastructure projects have been allocated 14 per cent of the budget, a one per cent increase over 2015. Overall spending on transport and economy has been maintained at 36 per cent.

To service its debt, bond and interest payments have been allocated five per cent of the budget, while 21 per cent of government spending has been earmarked for security, justice and safety.

Contrary trends

Earlier in the year, the UAE cabinet had approved a zero deficit draft federal budget of AED48.5bn for 2016, which was down 0.6 per cent or AED500m from the previous year. Economists and analysts had expected budget cuts by individual emirates as a prolonged dip in oil prices take a toll on government revenues. Dubai’s expansionary budget is contrary to those expectations. Later in the day, Saudi Arabia will release its state budget plan for 2016.

This article first appeared on AMEinfo’s sister publication TRENDS