Dubai ruler approves USD15.55B budget for 2021

DUBAI (CNA) – Dubai, the business and financial hub of the United Arab Emirates, approved a AED57.1 billion (USD15.55 billion) budget for 2021, when the economy is expected to recover from a contraction this year, its ruler said on Sunday.

The statement did not give a comparison to actual spending in 2020, but was slightly higher than a revised spending figure of nearly AED56.16 billion quoted in Dubai’s sukuk prospectus seen in August.

However, the size of the 2021 budget is 14 per cent below the AED66.4 billion the government had initially planned for 2020.

Dubai government officials were not immediately available to comment.

This year’s budget factored in economic dividends from the Expo 2020 world fair, a six-month event originally slated to begin in October but postponed for a year due to the COVID-19 pandemic.

Lights shine down on an Emirati family looking at the under-construction Museum of the Future on National Day in Dubai, United Arab Emirates. PHOTO: AP

The 2021 budget, which was approved by Dubai’s ruler Sheikh Mohammed bin Rashid Al Maktoum, takes into account the exceptional economic conditions of the fiscal year 2020 and the repercussions of the pandemic on the global economy, the statement on Sheikh Mohammed’s website said.

Dubai, with its diversified trade and tourism economy, was hit hard by a lockdown and suspension of flights earlier this year. The economy is expected to contract 6.2 per cent in 2020 before growing four per cent in 2021, supported by the continued recovery of economic activities, it said.

The statement said Dubai is expected to achieve public revenues of AED52.314 billion, despite economic incentive measures adopted by the government to reduce some fees and freeze fee increases. That is 18.3 per cent above revised 2020 revenue expectations of AED44.2 billion in the sukuk prospectus.

Non-tax revenues, which come from state fees on various services, account for 59 per cent of the total expected revenues, while tax revenues account for 31 per cent.

This means Dubai is expected to post a deficit of AED4.786 billion in 2021, lower than revised 2020 deficit estimates of AED11.9 billion in the sukuk prospectus, but wider than the AED2.4 billion originally budgeted for 2020.

The public revenue forecast is based on ongoing operations in the emirate and does not rely on oil revenues, which account for four per cent of the total projected revenues for the fiscal year 2021.