2020 – 2022: 3 – Year Fiscal Budget of AED 196bn Announced

December 31, 2019

On Sunday, the 29th of December, 2019, Sheikh Mohammed bin Rashid, the Vice President and Ruler of Dubai, announced the 3-year fiscal budget plan until 2022. With the budget set to reach AED 196 billion, this is the first time that the government has set a 3-year budget.

With a focus on specific sectors, including social services, health, housing, and education, the year 2020 has an expense budget of AED 66.4 billion. The government is working towards the goal of making Dubai the most liveable city in the world.

For 2019, the budget was set to AED 56.8 billion. Thus 2020 witnesses a 16.9% increment from the previous year. This is supportive of Dubai’s Plan 2021 and the Expo 2020 Dubai. The government is working relentlessly to improve the performance of the emirate while strengthening its fiscal sustainability until 2022.

In 2019 alone, the government spent AED 9.2 billion on infrastructural projects of the Expo 2020. From the allocated budget for 2020, construction will be allocated a total of 12% from the governmental expenses. In addition to that, they are also setting a budget of 8 billion for infrastructural development in Dubai for the future. This is in tandem with the implementation of the 2015 Public-Private Partnership Law and will help them devise project financing mechanisms for long-term projects.

From the total government expenses, salaries and wages have been allocated 30%, while 24% of the budget has been allocated to health, education, social services for citizens and public services improvement. There is a special 3% budget reserved to hedge and get prepared for the Expo 2020.

The government is working towards maintaining UAE’s Dept ratio to no more than 5% in 2020’s total budget. This is reflective of the disciplined financial policy that the government wants to set in motion. As an expansionary financial budget, the government is willing to give economic incentives to get more investments into the Emirate which will in turn help improve its competitive edge. This will also herald the implementation of the Strategic Plan 2021 goals.

In an endeavour to get higher efficiency in government expenses, the Department of Finance is working towards initiatives like Unified Procurement Programme for government entities. In 2020, the government has estimated a non-tax revenue of 60% of the total revenue generated, while tax revenue is estimated to be covering 29% of the total and the government investment revenue will account for 5% of the total government.

In conclusion, this is a great expansionary fiscal decision and bodes well for the Emirates in the next 3 years.

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