The UAE cabinet, chaired by HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has approved the largest-ever annual zero-deficit federal budget worth $16.6 billion for 2020 (with total expenditure up by 16.9%), heralding a new era of growth and development. The expansive budget aims to catalyze the national economy’s growth agenda while supporting the much-awaited Expo 2020.
Here are the highlights:
- Reflecting the strength of the national economy and the country’s abundant resources that can fund economic development projects, the budget amount has been increased more than 300 times since the first budget in 1971 and been without deficit for the third consecutive year.
- About 31 percent of the budget is allocated to social development, 14 percent to infrastructure and economic resources, 6.5 percent to social benefits, and 32.6 percent to government affairs.
- Public revenues are estimated to reach AED 64 billion ($17 billion), an increase of 25% year-on-year. These revenues are not based on oil sources, which only account for 6% of the total projected revenues for 2020.
- Revenues from sources other than tax account for 60% of the total expected revenue. Tax revenues account for 29% and revenues from government investments account for 5%.
- Salary and wages account for 30% of total government spending while grant and support expenditure accounts for 24%.
- Dubai will maintain a debt service rate of no more than five per cent of its total expenditure in 2020. Earlier, Dubai had projected that its economy would grow 3.2% in 2020, faster than the 2.1% growth recorded in 2019
- The Government of Dubai will allot a sum of around $2 billion to develop infrastructure projects and prepare for future projects, the implementation of the Public Private Partnership Law and the development of financing mechanisms.
The three-year budget cycle addresses the country’s future aspirations and underscores its focus on raising the happiness levels of its people and promoting entrepreneurship. It also highlights the government’s efforts to provide economic stability and boost key sectors, while encouraging innovation, scientific research, creativity and service excellence.
The $16.4bn billion federal budget set last year was part of a three-year, $49 billion budget for the 2019-21 period.