Dubai approves largest ever government budget for 2018 as it boosts spending on Expo 2020

Expo-related projects to benefit from cash injection

Dubai, United Arab Emirates - November 12th, 2017: Construction work on the Expo 2020 site at the Al Wasl Plaza. Sunday, November 12th, 2017 at Expo 2020 Site, Mohammad Bin Zayed Road, Dubai. Chris Whiteoak / The National
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Dubai has approved its biggest ever budget for 2018 as the emirate ramps up infrastructure spending to finance work for Expo 2020, the government said on Sunday.

Expenditure will surge 19.5 per cent to Dh56.56 billion from Dh47.31bn in 2017 and revenue will increase 12.5 per cent to Dh50.36bn from Dh44.78bn in 2017.

This will create a Dh6.2bn deficit, or 1.55 per cent of GDP, wider than this year’s projected Dh2.5bn shortfall.

The government did not say how it will finance the fiscal deficit in 2018, the second consecutive year of a shortfall.

In the past, Dubai has issued bonds and raise loans to plug the shortfall.


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The new budget will create 3,100 jobs and will include a 10 per cent increase in salaries and wages.

“Over the coming years, Dubai Government actively seeks to improve public budget performance continuously, in order to achieve financial sustainability, fulfil the emirate’s commitments, and realise the strategic objectives of Dubai 2021 Plan,” said Abdulrahman Al Saleh, director general of Dubai Government’s Department of Finance (DOF).

“Further, this aims to make the upcoming mega international event – Expo 2020 Dubai – one of the best in the history of Expo exhibitions.”

Infrastructure spending will rise 46.5 per cent next year as the emirate prepares for construction projects related to expo 2020, representing 21 per cent of total expenditure in 2018.

In the 2017 budget, the government had projected a 27 per cent jump in spending as the emirate prepares for Expo 2020.

The government has earmarked more than Dh5bn for Expo-related projects this year. Total government investment for the Expo is forecast at Dh25bn.

In addition, the new metro extension leading to the Expo will cost Dh10.6bn.

The second biggest expenditure item in the 2018 budget is the social development sector – which includes health, education, housing, community development and innovation - representing 33 per cent of total spending, followed by security, justice and safety sector with 16 per cent.

With regards to revenue, 71 per cent will come from non-tax government fees, 21 per cent from tax revenues and 2 per cent from government investments. The oil sector will only contribute 6 per cent to total revenues. The government’s tax revenue will rise next year with the introduction of 5 per cent value-added tax as of January 1.

Dubai’s economic growth is expected to pick up pace next year, thanks to government spending on infrastructure, economists have said.

The IMF is projecting growth of 3.3 per cent for Dubai’s economy this year, and 3.5 per cent next year, up from 2.9 per cent growth last year.

Earlier, the UAE Cabinet met and approved ministers approved the National ‎Strategy for Higher Education, which sets out to build and achieve the highest scientific and ‎professional education standards to serve the UAE’s future generations. ‎

"We have come a long way from having 40 university students 46 years ago, to 77 public and private ‎universities today," said Sheikh Mohammed bin Rashid, Vice President, Prime Minister and Ruler of Dubai.

"We are seeking through the National Strategy for Higher Education to have our ‎universities among the top 100 universities in the world.

"The National Strategy for Higher Education seeks to provide future generations with the necessary ‎technical and practical skills to drive the economy in both public and private sectors. It also aims to ‎prepare a generation of Emirati professionals to sustain growth in vital sectors and compete with the ‎best countries in the world."