Dubai’s decision to approve a Dh56.6 billion budget — the largest ever for the emirate — will go a long way in giving the economy a significant boost in 2018 and for years to come.
This budget comes in at 19.5 per cent bigger than last year’s and features a significant increase in spending on infrastructure. This reflects the emirate’s efforts to implement the Expo 2020 projects, which includes the main expo building and the supporting service projects, such as roads and the Metro expansion. Expo 2020 by itself makes up 43 per cent of the budget.
A budget of this size is especially critical given the current economic climate. The regional economies are still struggling to cope with the fall in oil prices in 2014, and while the UAE has managed to diversify its economy it is quite clear that further governmental spending is still critical.
This announcement will spur growth across multiple sectors of the economy, especially construction and tourism. It will create jobs, help boost investors’ confidence, and even lift the local stock markets. It will also have a long-term effect on the economy. The projects built today will continue to benefit Dubai, and the UAE economy as a whole for a generation to come. Not only will it establish a vibrant internal infrastructure to foster trade and manufacturing, but it will build the country’s profile as a hub for reliable commerce. This budget could be a turning point for the region and the UAE especially as the budget guides the country’s move into the post-oil area. That can be seen from a look at the revenue sources in the budget and — this can’t be emphasised enough — where the money isn’t coming from.
In line with Dubai’s stated efforts to reduce the emirate’s dependence on oil, it represents only 6 per cent of the total expected revenues for the fiscal year 2018. And despite the economic conditions regionally, Dubai still expects estimated public revenues of Dh50.4 billion, which shows a 12 per cent increase over last year.
Abdul Rahman Saleh Al Saleh, Director General, Dubai Government’s Department of Finance, has made government’s intention with the budget quite clear.
“Over the coming years, Dubai Government actively seeks to improve public budget performance continuously, in order to achieve financial sustainability, fulfil the emirate’s commitments, and realise the strategic objectives of Dubai 2021 Plan,” he said.