Ruler of Dubai, Vice President and Prime Minister of the UAE, His Highness Shaikh Mohammad Bin Rashid Al Maktoum approved the Government of Dubai’s 2018 General Budget Law No (21) for the year 2017 on Sunday, with a total of Dh56.6 billion earmarked for expenditure.
Expenditure will surge 19.5 per cent to Dh56.56 billion from Dh47.31bn in 2017 and revenue will increase 12.5 percent to Dh50.36bn from Dh44.78bn in 2017. This will create a Dh6.2bn deficit, or 1.55 percent of GDP, wider than this year’s projected Dh2.5bn shortfall. The government did not say how it will finance the fiscal deficit in 2018, the second consecutive year of a shortfall. In the past, Dubai has issued bonds and raise loans to plug the shortfall.
The 2018 budget has also shown the importance that the government gives to social services, including healthcare, education, culture, and housing. Despite this increase in spending, the government has managed to achieve financial sustainability by achieving an operating surplus of Dh2.5 billion, illustrating the breadth of the financial solvency of Dubai.
Dubai budget focuses on Expo 2020
Dubai unveiled a Dh56.6 billion budget for 2018 with a focus on infrastructure projects led by Expo 2020 and social development programmes to create more than 3,100 jobs next year. The budget’s overall spending saw a 19.5 percent increase over 2017.
The increase was due to the focus on meeting the needs of Expo 2020, whose investment value is estimated at Dh25 billion, as well as the expansion of the Dubai Metro’s Route 2020, estimated at around Dh10.6 billion. In this context, the Department of Finance has reached the final stage of the Dh5.5 billion financing agreement based on the export credit guarantee system. This will create more job opportunities and increase wages. Moreover, salaries and wages saw a 10 percent increase over 2017.
Infrastructure allocation increased by 46.5 percent over the fiscal year 2017, making up 21 percent of total government expenditure. This reflects the emirate’s keen efforts to implement the Expo 2020 projects according to a well-studied schedule that includes the main expo building, and the supporting service projects, such as roads, bridges, sewage, transport and metro lines, as well as work to prepare the entire area for post-expo events.
The fiscal year 2018 highlights the priority that the government has placed on human resources, which is seen by Sheikh Mohammed as “the true wealth of the nation”. The expenditure on social development fields of health, education, housing, community development and innovation represents 33 percent of the total spending.
The expenditure on social development sector fields of health, education, housing, community development, and innovation represents 33 percent of the total government spending. Elsewhere, the government allocated 16 percent of total spending to the security, justice and safety sector, in order to develop it, and enable it to play its vital role.
Dubai has also given its support to the Government Excellence, Innovation and Creativity Sector by allocating 8 percent of total government expenditure to develop performance and embed a culture of excellence, innovation, and creativity.