Dubai's 3-year budget to boost post-pandemic economic recovery

Dubai's Dh181-billion budget for 2022-24 approved on Sunday will help accelerate post-Covid economic recovery. It will help boost entrepreneurship, "enhance society's happiness and consolidate Dubai's position as a land of opportunities and innovation", the government said on Sunday.

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, also approved the general budget for the fiscal year 2022, with Dh59.95-billion expenditure.

The budget cycle will support Dubai's efforts to "stimulate the macro economy."

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Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council, said: "The Dubai government continues to consolidate the emirate's position as a leading global commercial hub and raise its international competitiveness by creating new growth opportunities for vital sectors.

"Dubai's general budget for the fiscal cycle of 2022-2024, which reflects the fundamental strengths and stable base of the emirate's economy, supports the realisation of its future economic aspirations, in addition to placing the emirate at the forefront of worldwide efforts to promote recovery."

The three-year budget cycle focuses on increasing economic growth rates by activating the public-private partnership ecosystem. It also addresses the social aspects of healthcare and education, as well as digital infrastructure development and financial sustainability programmes.

Housing

The budget raises the value of citizens' housing loans to Dh1 million. It allocates more than 4,000 plots and houses with a total value of Dh5.2 billion in the first phase of the housing programme for citizens in Dubai within a broader 20-year Dh65-billion scheme.

The budget also focuses on developing the Social Benefits Fund by supporting families and people of determination.

Operating surplus

Abdulrahman Saleh Al Saleh, Director-General of the Department of Finance (DoF), Government of Dubai, said adopting disciplined financial policies has led to an operating surplus of Dh1.8 billion — which is about three percent of the expected total revenue.

"This will contribute to the development of the emirate's infrastructure programmes and consolidate its financial sustainability policy," he said.

Projected government revenues

The 2022 budget expects to achieve revenues estimated at Dh57.55 billion — an increase of 10 per cent as compared to last year.

Dubai is one of the first cities in the world to achieve a rapid recovery due to the economic stimulus measures approved by the government that reduced some government fees for businesses and put a freeze on fee increases until 2023.

These revenues are based on ongoing operations and do not rely on oil.

"Oil revenues account for six per cent of the total projected revenues for the fiscal year 2022, which creates the conditions for enhanced financial sustainability. Non-tax revenues, which come from fees, account for 57 per cent of the total expected revenues. Tax revenues account for 31 per cent, and government investment represents six per cent of the total expected revenues," the government said.

Projected government expenditure

Salary and wage allowances of the 2022 budget account for 34 per cent of total government spending, in accordance with the requirements of the new human resources law. Grant and social support expenditure accounts for 21 per cent of all expenditure, in order to meet the requirements of human and community development and provide public services to residents.

The government has allocated an amount of Dh5.2 billion for construction projects.

It has also set aside nine per cent of the total expenditure to maintain the volume of investments in infrastructure.

Two per cent of the total expenditure is allocated to the private reserve to support emergency preparedness programmes, while public debt accounts for six per cent.

Sectoral distribution

Government spending on the social development sector in areas of health, education, housing and women and children's care; as well as developing reading and coding initiatives; and supporting athletes and people of determination, represents 30 per cent of the total expenditure.

The government's concern for security, justice and safety sees 23 per cent of the total expenditure being allocated to promote enhanced efficiency in the sector.

Dubai's keenness to develop its infrastructure and transportation, apart from hosting Expo 2020 Dubai, has led to an allocation of 42 per cent of total spending to the sector.

Dubai has also allocated five percent of the total government expenditure to develop performance and instil a culture of excellence.

• Dubai