UAE Vice President, Prime Minister, and Ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum has approved Dubai’s government general budget for the fiscal year 2021, with total expenditures of $15 billion (AED57.1 billion).
The recently announced budget will take account of the “exceptional economic conditions” of the 2020 fiscal year and the impact on the global economy of the COVID-19 pandemic. It will also confirm the potential of the emirate to cope up with the crisis, to restore the pace of economic development, to reinforce social benefits and critical services, and to adopt policies that achieve growth, economic stability, and financial sustainability in the medium and long term.
The government said in a statement that it is expected to achieve public revenues of $14 billion (Dh52.314 billion), despite the cut or freeze on fees as an economic incentive measures to tackle the crisis.
The 2021 budget also shows sustained efforts to increase revenue, cost efficiency, and private sector engagement. As part of the goal of making Dubai one of the best cities in the world to live in, the new Dubai budget will continue to support social, health, educational, and cultural services as well as investments in infrastructure services in the emirate.
Arif Abdulrahman Ahli, Executive Director, Planning and General Budget Sector at DOF said, “The 2021 budget comes in response to the requirements for recovery and dealing with the postponement of Expo 2020 Dubai. It also reflects the emirate’s financial stability through its implementation of financial policies as per best global practices.”
“Initial estimates for 2021 suggest that GDP will see four percent growth, supported by the continued recovery of economic activities. The government will continue to enhance the role of the private sector so it can serve as one of the main engines of economic growth,” Mr. Ahli added.
“Dubai’s Strategic Plan 2021 is a key pillar in Dubai’s journey towards the future. Dubai Government has succeeded in implementing programs that aim to achieve structural, economic, and financial reforms, in addition to launching initiatives to diversify the economic base. These programs and initiatives have contributed to stimulating the growth of local GDP, which played a vital role in enhancing the resilience of the local economy during the pandemic. Investment in the technical infrastructure enabled the government and the private sector’s rapid response to business transformation.”
Government expenditures for 2021
In 2021, salary and wage allowances would account for 35 percent of government expenditure to ensure “family and community stability”, the statement said. The government will spend a quarter of its budget on grants and public support for economic development and public services.
An additional 20 percent of the budget will be allocated to general and administrative expenditures and 9 percent to sustain the volume of infrastructure investments.
“This comes alongside the completion of some projects, the activation of the public-private partnership law, and the development of project financing mechanisms in Dubai government through long-term financing,” the government said.
The Dubai government has allocated 1 percent of total expenses to the private reserve to compensate for the effects of the crisis. It will spend 6 percent to service the public debt “to follow a disciplined fiscal policy that ensures the budget fulfills all obligations.”
Around 3 percent for capital expenses and 22 percent to support security, justice, and safety in the emirate, will be allocated, said in the statement.
Dubai has taken steps to assist companies and individuals, carrying out $1 billion (Dh6.8 billion) in stimulus and economic support measures, to help cushion the effects of the pandemic.
According to previous government forecasts, Dubai’s economy is expected to grow 4 percent next year, recovering from the 6.2 percent contraction in 2020 due to the impact of the COVID-19 pandemic.