Dubai’s budget for 2019 is perhaps better than most would have hoped for. Some of what we saw in Tuesday’s announcement was expected, such as the increased spending on infrastructure ahead of Expo 2020. The budget also avoids excessive deficit spending, which will help maintain Dubai’s credit rating — a move in contrast to many other governments in the region, which are struggling to boost their economies in the face of another precipitous fall in oil prices.

Almost every economist, analyst and banker we have spoken to over the last few weeks kept returning to that point: Oil. More than rising interest rates or global trade wars, the impact of falling oil prices will continue to play a significant role in the Middle East. Since prices crashed in 2014, many of the oil-producing countries of the world, the so-called Opec+, have banded together in an effort to lift prices, but those efforts have resulted in only sporadic and temporary successes.

The budget shows only 8 per cent of Dubai’s revenue comes from oil, which highlights its anomalous role in the region. The emirate has a growing economy (2.8 per cent in 2018) despite its non-reliance on oil, a sign of a diversified economy. But the government is obviously aware that its neighbours, with which a large number of Dubai-based companies do business, do not. Just like in 2015, the fall in oil prices and its effects on regional budgets will still have an indirect impact here.

This is on top of a number of geopolitical events, such as the ongoing global trade war. The UAE has not been impacted directly by the increasingly caustic actions taken elsewhere, but with no clear solutions in place, it should be prepared for a global economic downturn.

That’s what makes the budget so important. It focuses on factors that drive long-term economic growth, such as infrastructure, health care and education. Knowing that 2019 is likely to be a challenging year, Dubai is looking to maintain stability.

But the budget itself may not be enough. Dubai will need to find more ways to boost the economy, but with a government freeze on fees already in place and with its existing revenue already allocated to necessities, it will have to consider unusual steps. As we have said previously, measures to incentivise economic growth and boost business confidence will indeed be timely for investors. It’s time now for a review of regulatory measures that are at play in a negative manner.