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Citizens top priority in UAE’s $16.4bn 2019 budget, growing economy

The UAE announced a robust 2019 budget and tripled the effort over the next 3 years, spending and growing the economy, all the while with an eye to supporting citizens in key areas vital to the country’s wellbeing.

What’ the new budget?

The UAE cabinet approved a zero-deficit budget of $16.4bn (AED60.3bn) for 2019, an increase of 18% on 2017, where 42.3% of the budget allocated to the community development programs, 17% to the education system and 7.3% to develop the health sector and provide medical services.

In addition, the UAE Cabinet approved a 3-year budget worth $49bn, with 59% going towards education and social development.

UAE’s Prime Minister Sheikh Mohammed bin Rashid Al Maktoum said: “Citizens are our top priority. We have allocated the bulk of the budget to ensure its prosperity, health, education, and security,” he said.

 “Our budget is without a deficit, and next year’s budget will be the largest in the history of the country.”

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Expected growth

The International Monetary Fund (IMF) said in May that UAE economic growth fell to just 0.5% in 2017 from 3.0% the previous year, due to a contraction in the oil sector.

The IMF believes that the UAE’s fiscal deficit is expected to remain at 1.6% of GDP this year, before returning to a surplus.

Economic growth in the UAE is expected to strengthen over the next several years driven on by higher oil prices and increased government spending in preparation for the Expo 2020 event, the IMF said recently.

The organization forecasts overall growth at 2.9% this year and 3.7% in 2019, putting inflation at 3.5% in 2018 and easing afterward.

Natalia Tamirisa, the IMF mission chief to the UAE said: “The gradual recovery is progressing and we see a similar pattern in Abu Dhabi”.

The IMF expects Abu Dhabi’s non-oil economy to grow 2.3% in 2018 and 3.6% in 2019.

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Economy-bolstering incentives

UAE federal authorities had in 2018 taken steps to spur economic growth and include a plan to offer some expatriates 10year visas, reduce government fees and easing some restrictions on 100% foreign ownership of businesses.

Abu Dhabi also unveiled a three-year, $13.6 billion economic stimulus program to encourage new industries and attract foreign investment.

Technology entrepreneurs, influencers, high-end individual investors and specialists in certain fields such as science, space and medicine would be eligible for the 10-year visa slated to be implemented by the end of this year, UAE daily Khaleej Times reports industry executives as saying.

It is expected that the new reforms will be focused on those professions and industries that meet the UAE’s strategic needs.