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The emirate's sound fiscal policies have helped trim debt to GDP ratio. Image Credit: Bloomberg

Dubai: Dubai’s public debt has dropped to 25 per cent of the emirate’s GDP after successfully repaying Dh29 billion, it was announced on Tuesday.

The achievement comes just one and a half years after the establishment of the Public Debt Management Office to handle government financing and the sovereign debt portfolio.

The office was established in line with the directives of Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council, and under the supervision of Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, Vice President and Minister of Finance.

The office was established to ensure efficient and effective management of the public debt portfolio with prudent cost and risk strategies while developing governance frameworks that strengthen the financial policies in the emirate.

Rashid Ali bin Obood Al Falasi, CEO of the Public Debt Management Office, attributed the successful repayment to the emirate’s sound fiscal policies.

“The Dubai government has succeeded in reducing public debt by about Dh29 billion to reach 25 per cent of the emirate’s GDP thanks to the strategic programme and initiatives launched to ensure the efficiency of the general debt portfolio and develop general financial policies,” he said.

"The DMO launched the Public Debt Sustainability Strategy Program for the years 2022-2024 immediately after its establishment, and through it, it was able to implement several initiatives that included enhancing the efficiency of the public debt portfolio, developing public financial policies, and enhancing the confidence that investors and financial institutions place in the government's financial center, by maintaining a high level of transparency and reliability,” he added.

Abdulrahman Saleh Al Saleh, Director General of the Department of Finance in the Dubai government, said: "The prudent financial policies adopted by the Dubai government have enabled it to manage its financial resources in a wise manner, and the support of the wise leadership has enabled the Department of Finance in recent years to achieve prudent spending on projects and improve revenues and diversify them and maximise the utilisation of financing tools, which facilitated it to meet its financial obligations on its scheduled dates in addition to expediting the fulfillment of some obligations."

Debt was reduced by paying off obligations arising from various financial instruments, including Dh3.3 billion in Islamic bonds, Dh5.2 billion in bank loans, and Dh20 billion as part of the financing provided by the government of Abu Dhabi and the Central Bank of the UAE.