His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, on Sunday approved Dubai's budget for the year 2012.
The budget directly applies directives as set by His Highness to focus on a prudent fiscal policy that provides the stimuli necessary to economic growth in the emirate, the completion of the main infrastructure projects, and chart government expenditure in order to consolidate financial sustainability.
The Department of Finance said that the 2012 public budget is based on a set of core principles, namely continuing efforts to raise the efficiency of government spending through increasing productivity and improving economic and social returns, according to a press release distributed on Sunday by the Dubai Government Media Office.
The budget also focused on diversifying the public revenue sources, increasing their returns, developing clear rules for transparency and fiscal discipline whereby all government departments will continue to implement the highest international quality standards, especially in the services sector.
According to the Department of Finance, the gap in 2012 public budget between the public revenues of Dh30.431 billion and public expenditures of Dh32.258 billion is estimated at around Dh1.827 billion. This constitutes 0.6 per cent of estimated GDP of the emirate, which is in line with international financial guidelines that state that the gap should not exceed three per cent of the GDP. This is further confirmation that the government is continuing to follow a rational expansionary fiscal policy as directed by the Supreme Committee of Fiscal Policy in the Emirate.
Furthermore, a 53 per cent drop in the deficit to Dh1.8 billion from the fiscal year 2011 forecasts shows the emirate is serious in dealing with the public budget deficit while maintaining the growth and support averages for social, economic sectors and public services.
In the 2012 budget for the Government of Dubai, the infrastructure, transportation and economic development sectors make up 41 per cent of total public expenditure. This includes a number of vital sectors including roads, transport, civil aviation, airports and tourism.
Twenty nine per cent of total public expenditure is allocated to the social development sector including areas of health care, education, housing and culture.
The budget shortfall of the United Arab Emirates member was set at 1.83 billion dirhams ($498.2 million) or 0.6 percent of its 2010 gross domestic product, down from a 3.78 billion gap or 1.3 percent of GDP planned for 2011.
Spending is projected at 32.26 billion dirhams, the statement said, slightly down from 33.68 billion planned for 2011. Revenues have been set at 30.43 billion dirhams, up from 29.91 billion projected for 2011.
The statement did not say whether Dubai planned to issue government bonds to finance the gap. The emirate's government launched a $500 million 10-year bond in June.
Dubai carrier Emirates raised $1 billion in a five-year issue the same month, yielding 5.125 percent, which attracted orders of over $5 billion.
The Gulf trade and business hub, whose budget stands at around 14 percent of that of neighbouring Abu Dhabi, does not release regular updates on its fiscal performance.
Dubai relies on various fees, taxes and customs duties for around 85 percent of its budget revenues since it lacks oil wealth of Abu Dhabi.
Fiscal policy is a key tool for UAE policymakers to steer the oil-reliant economy, as the central bank's flexibility is limited by the OPEC member's currency peg to the U.S. dollar.
Most of UAE government expenditure is undertaken by the individual emirates with Dubai accounting for around 11 percent of the total.
Dubai, which narrowly averted a bond default in 2009, could use money raised by its sovereign wealth fund to help repay $3.8 billion in bonds owed by state-linked firms which mature next year, a source said.
The Gulf Arab emirate has clawed its way back from the depths of its debt crisis, helped by an economic revival in trade and tourism and its safe-haven status amid the regional social revolts, but still faces the challenge of big debt repayments.
The budget directly applies directives as set by His Highness to focus on a prudent fiscal policy that provides the stimuli necessary to economic growth in the emirate, the completion of the main infrastructure projects, and chart government expenditure in order to consolidate financial sustainability.
The Department of Finance said that the 2012 public budget is based on a set of core principles, namely continuing efforts to raise the efficiency of government spending through increasing productivity and improving economic and social returns, according to a press release distributed on Sunday by the Dubai Government Media Office.
The budget also focused on diversifying the public revenue sources, increasing their returns, developing clear rules for transparency and fiscal discipline whereby all government departments will continue to implement the highest international quality standards, especially in the services sector.
According to the Department of Finance, the gap in 2012 public budget between the public revenues of Dh30.431 billion and public expenditures of Dh32.258 billion is estimated at around Dh1.827 billion. This constitutes 0.6 per cent of estimated GDP of the emirate, which is in line with international financial guidelines that state that the gap should not exceed three per cent of the GDP. This is further confirmation that the government is continuing to follow a rational expansionary fiscal policy as directed by the Supreme Committee of Fiscal Policy in the Emirate.
Furthermore, a 53 per cent drop in the deficit to Dh1.8 billion from the fiscal year 2011 forecasts shows the emirate is serious in dealing with the public budget deficit while maintaining the growth and support averages for social, economic sectors and public services.
In the 2012 budget for the Government of Dubai, the infrastructure, transportation and economic development sectors make up 41 per cent of total public expenditure. This includes a number of vital sectors including roads, transport, civil aviation, airports and tourism.
Twenty nine per cent of total public expenditure is allocated to the social development sector including areas of health care, education, housing and culture.
The budget shortfall of the United Arab Emirates member was set at 1.83 billion dirhams ($498.2 million) or 0.6 percent of its 2010 gross domestic product, down from a 3.78 billion gap or 1.3 percent of GDP planned for 2011.
Spending is projected at 32.26 billion dirhams, the statement said, slightly down from 33.68 billion planned for 2011. Revenues have been set at 30.43 billion dirhams, up from 29.91 billion projected for 2011.
The statement did not say whether Dubai planned to issue government bonds to finance the gap. The emirate's government launched a $500 million 10-year bond in June.
Dubai carrier Emirates raised $1 billion in a five-year issue the same month, yielding 5.125 percent, which attracted orders of over $5 billion.
The Gulf trade and business hub, whose budget stands at around 14 percent of that of neighbouring Abu Dhabi, does not release regular updates on its fiscal performance.
Dubai relies on various fees, taxes and customs duties for around 85 percent of its budget revenues since it lacks oil wealth of Abu Dhabi.
Fiscal policy is a key tool for UAE policymakers to steer the oil-reliant economy, as the central bank's flexibility is limited by the OPEC member's currency peg to the U.S. dollar.
Most of UAE government expenditure is undertaken by the individual emirates with Dubai accounting for around 11 percent of the total.
Dubai, which narrowly averted a bond default in 2009, could use money raised by its sovereign wealth fund to help repay $3.8 billion in bonds owed by state-linked firms which mature next year, a source said.
The Gulf Arab emirate has clawed its way back from the depths of its debt crisis, helped by an economic revival in trade and tourism and its safe-haven status amid the regional social revolts, but still faces the challenge of big debt repayments.
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