Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, has approved the emirate's budget for 2024 to 2026 that allocates Dh246.6 billion ($67.14 billion) of expenditure.
Sheikh Mohammed also approved Law No 20 of 2023 for the general budget for the fiscal year 2024.
The emirate has earmarked Dh79.1 billion for spending next year. The move reflects Dubai's fast economic recovery and boosts its ambitions to stimulate the macroeconomy and support the objectives of the Dubai Strategic Plan 2030 development project, as well as the Dubai Economic Agenda D33, the Dubai Media Office said in a statement on Monday.
The emirate expects to achieve public revenue of Dh90.6 billion next year, of which Dh85.1 billion has been allocated to the budget and Dh5.5 billion to the general reserve.
The financial plan for the next three years aims to boost entrepreneurship, attract more foreign investment, promote social welfare, support fields like space research, digitisation and artificial intelligence, and consolidate the emirate's position as a “land of opportunity and innovation”, the statement said.
The new budget will play an “instrumental role in achieving our goals to double the city’s GDP [gross domestic product] and propel it into the ranks of the world's top three urban economies over the next decade”, Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, said.
“At the same time, the budget reflects our commitment to harmoniously balance the highest growth ambitions with economic stability, underpinned by prudent financial policies,” he added.
“The financial sustainability, competitiveness and transparency embedded in this budget will make Dubai even more appealing to investors and businesses from across the world seeking new opportunities.”
The emirate, the commercial and trading centre of the Middle East, has allocated 34 per cent of total government expenditure of next year's budget to social development.
This includes sectors such as health, education, scientific research, housing, care for needy families and women and children, reading, translation and programming initiatives, development of youth and sports, care for senior citizens and retirees, and care for people of determination.
The Dubai government has also allocated 19 per cent of total expenditure to the security, justice and safety sector.
Spending on infrastructure, including roads, tunnels, bridges, transport, sewage stations, parks, renewable energy sources and waste treatment facilities accounted for 42 per cent of total spending.
Placing emphasis on supporting the public services sector, government excellence, creativity, innovation and scientific research, the emirate has allocated 5 per cent of total government spending to develop performance and foster a culture of excellence, innovation and creativity.
Abdulrahman Al Saleh, director general of Dubai Government’s Department of Finance, said the government is committed to adopting disciplined financial policies.
“This has led to the establishment of a general reserve from annual revenues that is set to reach around Dh20.6 billion as planned for the three years 2024-2026 … DOF expects to achieve an operating surplus of up to 3.3 per cent of Dubai’s GDP, during the 2024-2026 financial plan, in order to establish the foundations of the emirate’s financial sustainability,” he added.
Grants and government support expenditure will account for 23 per cent of next year's total budget expenditure, while general and administrative expenditure also makes up 24 per cent.
The government has allocated 8 per cent of total expenditure to construction. This sends a “strong signal to the private sector about Dubai’s determination to continue developing its infrastructure and delivering more strategic development projects”, Dubai Media Office statement said.
Dubai is also keen to hedge against any situation that may result from global crises by allocating a special reserve of 8 per cent of the total expected expenditure in the budget.
The emirate has also maintained a debt service ratio that does not exceed 7 per cent of its total expenditures, as part of its disciplined financial policy. Salaries and wages constitute 26 per cent of total government spending.
Business activity in Dubai's non-oil private sector economy remained robust in September as sales growth hit the highest in more than four years amid improving demand.
The emirate's seasonally adjusted S&P Global purchasing managers' index reading rose to 56.1 in September, marking its strongest performance in three months, up from 55.0 in August.
Dubai’s economy expanded an annual 3.2 per cent in the first half of 2023 to reach Dh223.8 billion, driven by 3.6 per cent growth in the second quarter of the year, according to government data.
The emirate's economic performance extends the momentum of growth achieved in 2022, when the emirate expanded by 4.4 per cent. It is forecast to grow by 3.5 per cent in 2023, according to Emirates NBD.
The emirate's transport and storage sector outperformed all other industries, expanding 10.5 per cent in the first six months of the year.
The sector, which includes land, sea and air transport and logistics, contributed 42.8 per cent to overall growth and injected Dh31.4 billion into the economy.