Dubai’s government expects to spend AED57.1 billion ($15.5bn) next year as it tries to mitigate the impact of the coronavirus, according to the budget approved on Sunday.
The program takes into account “the exceptional economic conditions of the fiscal year 2020 and the repercussions of the Covid-19 pandemic on the global economy”, according to a statement on the website of Sheikh Mohammed Bin Rashed Al Maktoum, Prime Minister of the United Arab Emirates and ruler of Dubai.
Government revenue is expected to reach AED52.3bn ($14.2bn), it said. The budget “sends a clear message to the business community that Dubai is pursuing an expansionary fiscal policy”, according to the ruler’s website.
.@HHShkMohd approves #Dubai Government's general budget for 2021 with AED57.1 billion expenditures.https://t.co/GLRJsl3poA pic.twitter.com/l9HW8MUWlq
— Dubai Media Office (@DXBMediaOffice) December 27, 2020
“Initial estimates for 2021 suggest that GDP will see four percent growth, supported by continued recovery of economic activities. The government will continue to enhance the role of the private sector so it can serve as one of the main engines of economic growth,” said Arif Abdulrahman Ahli, executive director, planning and general budget sector at DOF.
“We will also continue to support SME’s in conjunction with the government’s continued implementation of structural reforms aimed at diversifying the economy, improving the business environment and opening new horizons for domestic and foreign investment.”
Oil revenues account for four percent of the total projected revenues for the fiscal year 2021. Non-tax revenues, which come from fees, make up for 59 percent, while tax revenues account for 31 percent, and government investment revenues represent six percent of the total expected revenues.
Salary and wage allowances of the 2021 budget account for 35 percent of total government spending, in accordance with the requirements of the new human resources law, to ensure family and community stability. Grant and support expenditure account for 26 percent in order to meet the requirements of human and community development and provide public services to the residents of the emirate.
The government has approved nine percent of the total expenditure to maintain the volume of investments in infrastructure. While 41 percent of spending has been earmarked for infrastructure and transportation, six percent to service public debt and one percent has been allocated to the private reserve.
“The 2021 budget comes in response to the requirements for recovery and dealing with the postponement of Expo 2020 Dubai,” added Ahli.
The emirate revised this year’s budget revenue to AED44.2bn ($12bn), according to the prospectus for its bond sale, down more than 30 percent from what it originally envisaged. It also decreased its projected expenditure to AED56.2bn ($15.3bn) for 2020, leaving a deficit of AED11.9bn ($3.2bn).
The emirate’s economy will likely contract 6.2 percent this year, the emirate’s media office said last week.
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