Dubai backs its biggest budget for next year to step up work on Expo

Dubai has approved its biggest budget for next year as the emirate increases infrastructure spending to finance work for Expo 2020.

Expenditure will surge by 19.5 per cent to Dh56.56 billion from Dh47.31bn this year and revenue will increase 12.4 per cent to Dh50.36bn from Dh44.78bn in 2017.

This will create a Dh6.2bn deficit, or 1.55 per cent of GDP, wider than this year’s projected Dh2.5bn shortfall.

The emirate’s government did not say how it would finance the fiscal deficit next year, the second consecutive year of a shortfall. In the past, Dubai has issued bonds and raised loans to close the gap.

The budget will create 3,100 jobs and will include a 10 per cent increase in salaries.

“Over the coming years the Dubai Government actively seeks to improve public budget performance continuously, to achieve financial sustainability, fulfil the emirate’s commitments and realise the strategic objectives of Dubai 2021 Plan,” said Abdulrahman Al Saleh, director general of the Department of Finance.

“Further, this aims to make the coming mega international event, Expo 2020 Dubai, one of the best in the history of Expo exhibitions.”

Infrastructure spending will rise 46.5 per cent next year as the emirate prepares for construction projects related to Expo 2020, representing 21 per cent of total expenditure.

In the budget for this year, the government had projected a 27 per cent jump in spending as the emirate prepared for Expo 2020.

The government has set aside more than Dh5bn for Expo-related projects this year. Total government investment for the event is forecast at Dh25bn, with an additional Dh10.6bn for the new metro extension leading to the site.

The second biggest expenditure item in the budget is social development – which includes health, education, housing, community development and innovation – representing 33 per cent of total spending. That is followed by security, justice and safety with 16 per cent.

Seventy-one per cent of revenue will come from nontax government fees, 21 per cent from tax revenues and 2 per cent from government investments.

The oil sector will contribute only 6 per cent.

The government’s tax revenue will rise next year with the introduction of 5 per cent value-added tax as of January 1.

Dubai’s economic growth is expected to pick up pace next year, thanks to government spending on infrastructure, economists say.

The International Monetary Fund is projecting growth of 3.3 per cent for Dubai’s economy this year, and 3.5 per cent next year, up from 2.9 per cent growth last year.

The UAE Cabinet met yesterday and approved the National Strategy for Higher Education, which sets out to build and achieve the highest scientific and professional education standards to serve the UAE’s future generations.

“We have come a long way from having 40 university students 46 years ago, to 77 public and private universities today,” said Sheikh Mohammed bin Rashid, Prime Minister and Ruler of Dubai.

“We are seeking through the National Strategy for Higher Education to have our universities among the top 100 universities in the world.

“It seeks to provide future generations with the necessary technical and practical skills to drive the economy in public and private sectors.

“It also aims to prepare a generation of Emirati professionals to sustain growth in vital sectors and compete with the best countries in the world.”

Expenditure will surge by 19.5 per cent to Dh56.56 billion from Dh47.31bn this year