High oil prices are boosting revenues, allowing the government to increase spending for the well-being of citizens and residents
The latest UAE Cabinet meeting last Sunday saw the approval of the biggest-ever budget for 2019 thanks largely to the high oil prices which in turn has boosted revenues allowing the government to increase their spending on the well-being of the citizens of the UAE.
The Cabinet approved a zero-deficit budget of Dh180 billion for the next three years and Dh60.3 billion for 2019 alone. The 2019 budget is a 17.3 per cent rise from this year’s budget of Dh51.4 billion.
According to a statement by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, fifty-nine per cent of the budget will go to education and social development. Sheikh Mohammed continues by saying that the citizens of the UAE are the top priority hence the reason that the largest part of the budget is allocated to ensure their prosperity, health, education and security.
The UAE has allocated 42.3 per cent of the budget for community development, 17 per cent for education and 7.3 per cent for healthcare.
During the Cabinet meeting, a new federal law was adopted to regulate the space and advanced technology sectors in the UAE. The goal of this law is to open up the space sector to further investment, research and partnership building.
The budget announced on Sunday indicates an expenditure of Dh60 billion per annum over the next three years. Higher oil revenues have enabled the government to increase spending which is very timely right now as some sort of increase in government spending is necessary to boost economic activity in the country, said the Head of Fixed Income Research at Emirates NBD.
Oil prices have been on the rise over the last few months, crossing $80 per barrel, leading to an increase in revenues for the UAE government. Brent last traded at $82.73 per barrel on Friday which is approximately 20 per cent higher than the price at the start of 2018, when the average Brent and WTI crude oil price was $69.08 and $63.7 per barrel, respectively.
According to a chief economist at Abu Dhabi Commercial Bank, the 2019 federal budget increase reflects a significantly more expansionary fiscal stance. Such a shift indicates an evident supportive fiscal policy which is in line with the recent packages aimed at supporting growth a country-side and Emirate level.
She goes on to state that an accelerated consolidated government spending can be expected in 2019, which will be central to the banks assumption of stronger real-non-oil GDP growth.
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Source: Khaleej Times