Sheikh Mohammed approves Dhs205bn Dubai budget for 2023-25

Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, and Ruler of Dubai has approved the Government of Dubai’s general budget for the fiscal cycle of 2023-2025, with total expenditures of Dhs205bn.

The financial plan for the next three years (2023-2025) shows the Dubai government’s commitment to provide the highest economic stability and stimulate growth across the emirate’s business sectors.

The plan also gives a clear picture of the government’s economic goals during this period, and supports medium-term planning for various economic sectors.

.@HHShkMohd approved the Dubai Government’s budget for 2023-2025 with total expenditures of AED205 billion. This budget reflects Dubai’s commitment to meet the city’s future aspirations locally & globally. pic.twitter.com/SXfD2hepEg

— Hamdan bin Mohammed (@HamdanMohammed) December 8, 2022

Sheikh Mohammed also issued Law No. (23) of 2022 regarding the General Budget of the Dubai Government for the Fiscal Year 2023. The government’s total expenditures for the 2023 fiscal year are estimated at Dhs67.5bn.

In its 2023 budget, Dubai continues to focus on social services and the development of the health, education and culture sectors. The budget also places high priority on the housing sector through Dubai’s Housing Programme as part of a plan for the next 20 years. The budget is also focused on developing the social benefits fund to support families, people of determination and people with limited income.

Abdulrahman Saleh Al Saleh, director general of the Department of Finance (DOF) for the Government of Dubai, said, “The three-year budget cycle sends a strong pro-growth message to Dubai’s business sectors, and reflects Dubai focus on developing its financial plan annually in line with global developments. The emirate seeks to provide economic incentives to attract investments, enhance the emirate’s competitiveness, and contribute to the implementation of benefits and targets that form part of the Dubai Strategic Plan 2030 and beyond.”

Projected revenues in 2023

As a result of the emirate’s rapid recovery from the consequences of the global pandemic, the Dubai government expects to achieve estimated public revenues of Dhs69bn, an increase of 20 per cent over the fiscal year 2022.

Oil revenues represent only about five per cent of the total expected revenues for the year 2023, which confirms the financial sustainability of the emirate.

Projected expenditures in 2023

Grants and social support expenditures account for 24 per cent of the total budget expenditures in 2023. The general and administrative expenditures make up a similar percentage (24 per cent ), while the government has allocated seven per cent of total expenditures to construction projects.

Dubai is also keen to hedge against any situation that may result from global crises by allocating a special reserve of five per cent of the total expected expenditures in the budget. To enable this, Dubai has maintained a debt service ratio that does not exceed six per cent of its total expenditures, as part of its disciplined financial policy.

Sectoral distribution of expenditures in 2023

A total of 34 per cent of total government expenditures of the 2023 budget goes to the social development sector in the areas of health, education, scientific research, housing, care for needy families and women and children, reading, translation and programming initiatives, development of youth and sports, care for senior citizens and retirees, and care for people of determination. Expenditures in this area represent an increase of four per cent over the 2022 budget.

As part of efforts to transform Dubai into one of the world’s best cities to live, work and visit, the Dubai government has allocated 20 per cent of total expenditures to the security, justice and safety sector.

Dubai’s continuous infrastructure development had a strong impact on the UAE’s global competitiveness. Spending on infrastructure, including roads, tunnels, bridges, transportation, sewage stations, parks, renewable energy sources and waste treatment facilities, accounted for 41 per cent of total spending.

The budget also shows the government’s keenness to support small projects and entrepreneurship, and provide a nurturing environment for micro-enterprises.

The emirate has also placed high emphasis on supporting the public services sector, government excellence, creativity, innovation and scientific research by allocating five per cent of total government spending.