Dubai's expansionary budget to reinvigorate economy
Dubai is ensuring that every aspect of its economy is taken care of.
Dubai - Investment drives demand, creates capacity, increases labour productivity and generates jobs.
The expansionary budget announced by Dubai on Sunday will boost the economy, businessmen and analysts said on Sunday.
"We are encouraged by the signal that this new budget sends to the market, and believe effective deployment of the expanded budget will provide much-needed economic stimulus and help to reinvigorate the economy. As the government does not have control of domestic interest rates, it must rely on fiscal stimulus and macro-prudential tools, such as relaxation of bank lending limitations, in order to stimulate the economy," said Zachary Cefaratti, CEO of Dalma Capital.
He noted that the continued expansionary policy, in combination with potentially improving geopolitical conditions and low interest rates, should allow the economy counteract deflation and restore growth.
"With asset prices subdued, restoring favourable economic conditions would provide investment opportunities in the market. Both fiscal and monetary policy have a lagged effect on the market, but we are cautiously optimistic about the Dubai economy in 2020-2021 and believe that the slowdown has also created great opportunities for astute investors," he added.
Vijay Valecha, chief investment officer at Century Financial, said the 16 per cent increase in budget expenditure will support not only Expo 2020-related activities but also Dubai Plan 2021. "Overall, the budget conveys a very optimistic message with expansionary fiscal policy in full swing," he added.
Rizwan Sajan, founder and chairman of Danube Group, said the budget reflects firm commitment to boost investment across sectors. "Trust me, it is investment that drives demand, creates capacity, increases labour productivity and generates jobs. I am sure this budget will take the nation to the new heights."
He noted that increase in spending will further strengthen the financial dynamics of the emirate, thereby creating more jobs and projects that are required to benefit people living and investing in UAE. "Whether it is Expo 2020 or social benefits, I see everyone reaping the fruits of success."
Kamal Vachani, group director of Al Maya Group, said this year's budget has key focus on the upcoming mega event in Dubai.
"Three per cent of allocation from the expenditure for the mega event reflects how serious Dubai is to ensure the success of Expo 2020. Since millions of overseas visitors from all over the world will come to visit the six-month long event, Dubai is ensuring that every aspect - be it financial, infrastructure development, etc - of the event is taken care of," he said.
Moreover, the Dubai government is also taking into account the overall macro-economic growth of the emirate, which is a long-term focus of the leadership.