Budget surplus grows Dh4.5bn

Oil price rally and cut in spending lead to 130% rise

ABU DHABI // The rally in crude prices and cut in government spending led to a Dh4.5 billion increase in budget surplus for the first nine months of last year, from the same period in 2015.

It rose 130 per cent to almost Dh8bn, from Dh3.48bn a year earlier, the state news agency Wam reported.

Brent crude prices increased to $49 a barrel from $37.22 be- tween January and the end of September last year.

For the whole of last year the budget was set for a negligible deficit, with revenue and spending forecast at about Dh48.5bn each.

In the first nine months, revenue was Dh37.46bn compared to Dh35bn in the same period of 2015, while spending fell to Dh29.71bn from Dh31.6bn.

Central Bank Governor Mubarak Al Mansouri said in November that the Government’s moves to reduce expenses and increase revenue from non-oil sources was helping the country’s overall economic health.

Since the price of oil began dropping in 2014, governments in the region have reduced ener- gy subsidies, cut spending and raised debt on international markets to control deficits.

They have also outlined ambitious plans to evolve their oil-reliant economies.

Measures have included raising value-added tax and selling some stakes in major state companies, such as Saudi Arabia’s Aramco, the world’s largest oil producer.

The IMF, which has hailed the Arabian Gulf’s efforts to plug budget deficits, is estimating that the UAE’s economy grew 2.3 per cent last year and forecasting it to expand by 2.5 per cent this year, broadly in line with the Central Bank’s estimates.