Wednesday, October 12, 2011

UAE approves draft 2012 budget of $11.4bn

The UAE government approved a draft 2012 federal budget of AED41.8bn ($11.4bn) on Tuesday, roughly the same as expected for this year, pencilling in a tiny deficit, state news agency WAM reported.

Revenue is projected to reach AED41.4bn next year, WAM said. That puts the budget shortfall of the world's No. 4 oil exporter at AED400m, a mere 0.04 percent of its economic output, according to Reuters calculations.

Health, education and social services will be the key budget priorities, Prime Minister and Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum said during Tuesday's cabinet meeting.

Some AED1.6bn should go on infrastructure projects next year, WAM said.

The federal budget accounts for roughly 11 percent of total government spending in the UAE, the world's second largest Arab economy, with the most occurring at the level of individual emirates, mainly in oil-rich Abu Dhabi.

Oil receipts are not directly included in the federal budget but grants from Abu Dhabi made up almost a third of the total income in 2010, while enterprise profits and various fees accounted for 70 percent, finance ministry data show.

Fiscal policy is a key tool for UAE policymakers to steer the hydrocarbon-reliant economy. Its dirham currency is pegged to the US dollar.

The 2012 budget still needs to be discussed by the Federal National Council, a government advisory body with no legislative powers, before it is signed by the president.

The cabinet also approved additional federal expenditures worth AED698m for 2011, including AED144m for the health ministry, the WAM said.

The UAE, which has avoided social unrest rocking nearby Bahrain, Oman and Yemen this year, set its budget spending at AED41bn and revenue at AED38bn for 2011.

Analysts polled by Reuters in September forecast the UAE to book a consolidated fiscal surplus of 7.8 percent of GDP in 2011 thanks to robust crude prices of over $100 per barrel. The country does not publish consolidated fiscal data.

The Gulf Arab federation of seven emirates spent AED39.6bn from its federal budget in 2010, the least in three years, ending the year with a AED207m surplus, or 0.02 percent of gross domestic product.

Sent from my iPad

No comments:

Post a Comment