Dubai’s 2018 budget approved with expenditure of Dh56.6b

In Dubai’s largest public budget ever, the emirate saw a marked increase in spending, primarily on infrastructure, while achieving an operating surplus of Dh2.5 billion

Dubai approved the Government of Dubai’s 2018 General Budget with a total of Dh56.6 billion earmarked for expenditure.

Featuring a 19.5 per cent year-on-year increase, the budget for the fiscal year 2018 comes in line with the Dubai Strategic Plan 2021’s targets.

The budget features a rise in infrastructure spending, which makes up 21 per cent of the total government expenditure

The 2018 budget has also shown the importance that the government gives to social services, including health care, education, culture and housing.

Despite this increase in spending, the government has managed to achieve financial sustainability by achieving an operating surplus of Dh2.5 billion, illustrating the breadth of the financial solvency of Dubai.

In line with Dubai’s efforts to reduce the emirate’s dependence of hydrocarbons, oil revenues represent 6 per cent of the total expected revenues for the fiscal year 2018.

On the revenue front, Dubai expects estimated public revenues of Dh50.4 billion, with a 12 per cent increase on this year.

Non-tax revenues (fees) represent 71 per cent, while tax revenues represent 21 per cent of the total 2018 projected revenues.

Revenues from government investments such as the Investment Corporation of Dubai (ICD), a sovereign wealth fund, represent 2 per cent.

The budget’s overall increase of 19.5 per cent can be explained by the renewed focus on the needs of Expo 2020, whose investment value is estimated at Dh25 billion, as well as the expansion of the Dubai Metro’s Route 2020, estimated at around Dh10.6 billion.

The statement from Dubai’s media office confirms that the DOF, Dubai’s finance department, has reached the final stage of a Dh5.5 billion financing agreement based on the export credit guarantee system.

Infrastructure allocation increased by 46.5 per cent on the fiscal year 2017, making up 21 per cent of total government expenditure.

This reflects the emirate’s keen efforts to implement the Expo 2020 projects according to a well-studied schedule, that includes the main expo building, and the supporting service projects, such as roads, bridges, sewage, transport and metro lines, as well as work to prepare the entire area for post-expo events and supporting events tourism.

Moreover, the statement adds that Dubai has been focusing its attention on the economy, infrastructure, and transport sectors as an integrated sector that it is seeking to develop continuously. Expo 2020 was a major driver of accelerated growth in this sector, which makes up 43% of the 2018 total spending. The statement from Dubai’s media office refers to the allocation of Dh5 billion to Expo 2020 projects as a signal for how serious Dubai is in addressing its future commitments.