By Camilla Hall
Government spending will exceed revenue by AED84.9bn ($23.1bn) this year.
Abu Dhabi forecast a second consecutive budget deficit this year, according to statistics included in a government-guaranteed bond prospectus Tuesday.
Government spending will exceed revenue by AED84.9bn ($23.1bn) this year compared with AED126.5bn last year, according to statistics in the Waha Aerospace BV prospectus.
The budget was based on an assumed average oil price of $60 a barrel compared with $40 last year.
Abu Dhabi is the UAE capital and holder of most of its oil resources. The UAE is the fifth-biggest OPEC producer and pumped 2.32 million barrels a day in June, according to Bloomberg data. (Bloomberg)
Since oil has averaged somewhere between $70 to $80 for most of 2010 I am not sure why this is a story. It is smart to project realistic numbers but since half the year is over, and since the oil price has averaged 15% to 25% higher than the budgeted projection it seems to me the story might be that despite the budgeted shortfall of $23 billion it is possible, due to the higher than projected oil price, Abu Dhabi's shortfall should be much lower than originally projected and it is possible there is a surplus depending on oil's price for the rest of the year. The story as it is written now would have been great back in January but not in July as anyone who follows the price of oil knows the story is really old news.