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The UAE Cabinet approved a record Dh51.4 billion federal budget for next year with a focus on education, healthcare, and community wellbeing as the country boosts spending off the back of stronger economic activity and a higher oil price.
Over the next four years, a total budget of Dh201.1bn has also been approved.
The budget for next year, which is balanced, is a 5.6 per cent increase from this year's Dh48.7bn, which also focused on social development, health and education.
The budget was approved during a Cabinet session, chaired by Sheikh Mohammed bin Rashid, held at the Sharjah International Book Fair on Tuesday.
The Vice President, Prime Minister and Ruler of Dubai, said all budget plans are for the service of the UAE society.
"We will spare no efforts in providing all the requirements for our people's happiness and well-being. The UAE people are our most valuable asset," he said.
The federal budget excludes the budgets of the individual seven emirates.
The Institute of International Finance is projecting the consolidated fiscal deficit of the UAE will shrink to 0.8 per cent of GDP next year from 3 per cent of the GDP in 2017. The increase in non-oil revenues through measures such as five per cent value-added tax will help reduce the UAE’s fiscal breakeven oil price to $58 a barrel in 2018 from $60 a barrel this year, offsetting any adverse impact from a potential increase in consolidated spending, the Washington-based institute said. Brent crude was trading at over US$63 per barrel on Tuesday, its highest level in more than two years.
The lion’s share of next year's budget, Dh26.3bn or 43.5 per cent of the total, is dedicated to social development programmes. Dh10.4bn is allocated for general education and higher education, totalling 17.1 per cent of the overall budget, and Dh4.5bn, or 7.4 per cent, is earmarked for the health sector.
Dh22.1bn or 36.5 per cent of the total budget has been allocated for government affairs.
Dh3.5bn will go to federal projects implemented by federal agencies. These include Dh891 million for ministries' projects, and Dh922m for projects aimed at developing and upgrading water and power stations in the country, which will be performed by the Federal Water and Electricity Authority.
Around Dh1.4 bn will be spent on projects under the Sheikh Zayed Housing Programme, Dh204m is allocated to the UAE Space Agency projects, and Dh25m to the UAE Red Crescent. The government also set aside Dh2bn to support government innovation through the Sheikh Mohammed Bin Rashid Al Maktoum Innovation Fund.
The Ministry of Finance worked in coordination with all ministries and federal entities to ensure their development plans and programmes are in line with the federal financial strategy, and with the objectives of the Government of the Future, reported state news agency Wam. The Cabinet met for its first extraordinary session on Tuesday since the recent government restructuring.
Sheikh Saif bin Zayed, Deputy Prime Minister and Minister of the Interior, and Sheikh Mansour bin Zayed, Deputy Prime Minister and Minister of Presidential Affairs, were among those who attended.
During its session, the Cabinet also adopted the restructuring of the Ministerial Council for Development, under the chairmanship of Sheikh Mansour bin Zayed.
The Cabinet also adopted Federal Decree-Law No. 08 of 2017 on Value Added Tax to be implemented at the beginning of January 2018, as well as a number of resolutions and initiatives on the agenda and approved a number of international treaties.