Sheikh Mohammed approves Dhs57.1bn spend in 2021 Dubai budget

Dubai’s government expects to spend Dhs57.1bn ($15.5bn) next year as it tries to mitigate the impact of the coronavirus, according to the budget approved on Sunday.

The programme takes into account “the exceptional economic conditions of the fiscal year 2020 and the repercussions of the Covid-19 pandemic on the global economy,” according to a statement on the website of Sheikh Mohammed Bin Rashed Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.

Government revenue is expected to reach Dhs52.3bn, it said. The budget “sends a clear message to the business community that Dubai is pursuing an expansionary fiscal policy,” according to the ruler’s website.

The emirate revised this year’s budget revenue to Dhs44.2bn, according to the prospectus for its bond sale, down more than 30 per cent from what it originally envisaged. It also decreased its projected expenditure to Dhs56.2bn for 2020, leaving a deficit of Dhs11.9bn.

Expectations and allocations:

* 35% of spending to go toward salary and wage allowances

* 9% of expenditure to maintain the volume of investments in infrastructure

* 6% of expenditure will service public debt

* 41% of spending earmarked for infrastructure and transportation

* Oil revenue accounts for 4% of the projected income

* Non-tax revenue, which comes from fees, makes up 59%

* Tax revenue accounts for 31%

* Government investment revenue represents 6%

The emirate’s economy will likely contract 6.2 per cent this year, the emirate’s media office said last week. It’s expected to see 4 per cent growth in 2021.