Dubai: The UAE will keep to its 2010 federal spending target of Dh43.6 billion and will end the year with a balanced budget as planned, a senior finance ministry official said Monday.

The world's third-largest oil exporter raised federal expenditure by 3.4 per cent for 2010.

The global credit crunch had halted an oil- and real estate-led boom in the UAE, resulting in the first economic downturn since 1993.

"It [the budget] is balanced until now as we planned," Saeed Rashid Al Yateem, Executive Director of Budget and Revenue, at the UAE finance ministry said in an interview.

When asked whether actual federal spending will be Dh43.6 billion as budgeted this year, he said: "Yes."

Fiscal policy is a key tool for UAE policymakers to steer the economy, as the central bank's flexibility is limited by the currency peg to the dollar.

The federal budget accounts for around 15 per cent of total UAE government expenditure, most of which is undertaken by the individual emirates.

It is financed with contributions from the seven emirates and income from fees and investments, but does not include oil receipts.

Al Yateem said the Fin-ance Ministry had already submitted a proposal for its new 2011-2013 budget to the government, but declined to comment on its parameters, saying only that the focus will be on infrastructure, education and healthcare.

"I cannot say anything until we get the final decision from the government. We already submitted our proposal," he said after a meeting of senior budget officials in Dubai.

"The main objectives for the three-year budget are to maintain stability in financial resources for the government," he said.

The Finance Ministry said in August it planned to increase federal spending in the next three years, adding there would be no deficit despite the expected rise.

Al Yateem refused to say whether the ministry has already budgeted any debt issuance in the new budget.

Dubai issued its first sovereign bond in a year in September.

The government is expected to approve a public debt law by the end of this year, which will set rules for debt issuance.