The Dubai Government aims to cut its spending by 4.5 per cent next year as part of a long-running effort to streamline operations while continuing to invest in infrastructure.
A budget approved yesterday by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, called for Dh32.26 billion (US$8.78bn) of government spending next year against anticipated revenues of Dh30.4bn, resulting in a projected Dh1.8bn deficit.
That spending was about Dh1.42bn less than the amount outlined in this year’s budget, reflecting an effort to improve efficiency and save money across government departments.
Next year’s slimmer budget represents “continuing efforts to raise the efficiency of government spending through increasing productivity and improving economic and social returns”, the Dubai Government Media Office said in a statement, citing the Department of Finance.
The Supreme Fiscal Committee of Dubai this year asked departments to trim outlays by 20 to 25 per cent by 2013.
As spending has decreased over the past few years, so has the Dubai Government’s deficit.
Next year’s projected deficit is smaller than this year’s spending gap of Dh3.77bn. The budget deficit last year was Dh6bn. Government budget deficits must be filled either by borrowing money or tapping other resources such as asset sales or wealth funds.
Next year’s deficit amounted to about 0.6 per cent of Dubai’s estimated GDP, the government statement said, adding that it was “in line with international financial guidelines that state that the gap should not exceed 3 per cent of the GDP”. More info