The UAE Cabinet yesterday approved a Dh44.6 billion ($12.1 billion) balanced federal budget for 2013, a 6.69 per cent increase over the Dh41.4 billion 2012 budget approved in November last year.
Social sector will receive Dh22.7 billion or 51 per cent of the total allocation, including Dh9.9 billion for the education sector, or 22 per cent of the total.
“The budget is part of a three-year government financial plan with total spending of Dh133 billion [From 2011-2013] in order to implement our strategic plans ,” His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, said in a statement.
This seeks to meet the requirements of the Federal government’s strategic plan for all sectors and at enhancing various services and social care provided to the citizens within an integrated vision that extends to the year 2021.
“Priorities for the 2013 budget will be health, education and social benefits for citizens as well as the improvement of government services,” Shaikh Mohammed said.
The Cabinet also approved the composite union budget for 2013, which includes the draft general budget as well as the budgets of independent federal authorities with total revenues estimated at Dh55 billion and a surplus of Dh5 million.
Dr. Giyas Gokkent, Chief Economist of the National Bank of Abu Dhabi, said, “The 2013 budget is in line with expectations. Most budgetary expenditures occur outside the federal budget in the UAE.”
The UAE federal budget , that involves expenditures and projects undertaken by the UAE Federal Government, represents only 11 per cent of the country’s overall spending. Budgets of the seven emirates make up the rest 89 per cent.
“Most budgetary expenditures occur outside the federal budget in the UAE. Consolidated expenditures in the UAE are at relatively high levels. Fortunately, high oil prices have allowed for the consolidated budget to register a surplus,” Gokkent said.
The UAE booked a consolidated budget surplus of Dh36.2 billion in 2011, or 2.9 per cent of the country’s 2011 gross domestic product (GDP), the finance ministry said earlier in October.
The UAE’s nominal GDP, which reached Dh1.32 trillion last year, is expected to cross Dh1.41 trillion this year, according to a latest estimate by the International Monetary Fund (IMF).
“The recovery of the economy is continuing despite the uncertain global economic environment. High oil prices and increased production, strong growth in Asia, and the UAE’s perceived safe haven status in the context of the regional turmoil contributed to an estimated real GDP growth of 4.9 per cent in 2011,” IMF said in its annual review of the UAE economy.