Dubai's Economy to Thrive with Dh56.8 Billion 2019 Budget

Published January 2nd, 2019 - 08:20 GMT
Around Dh9.2 billion will be allocated for infrastructure spending in the Dubai 219 budget. (Shutterstock)
Around Dh9.2 billion will be allocated for infrastructure spending in the Dubai 219 budget. (Shutterstock)

Dubai's 2019 budget with a focus on infrastructure and social development as well as job creation will accelerate economic activities and strengthen the emirate's position as one of the most preferred destinations for global businesses, analysts said.

Dr Hadi Shahid, managing partner, Alliott Hadi Shahid Chartered Accountants, said infrastructure spending will accelerate economic activities and help generate more employment opportunities.

"It's a pleasant surprise that His Highness Sheikh Mohammed has announced a surplus budget with good news that almost 2,500 new jobs will be created," he said. "Given vibrant activities in all sectors of the economy, 2019 seems to be a better year," he said.

On Tuesday, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, announced a Dh56.8 billion budget for 2019 as compared to last year's Dh56.6 billion budget and revenues of Dh51 billion, an increase of 1.2 per cent year on year.

In 2019, Dubai will continue supporting social services, including health, education and housing, as well as developing the Social Benefits Fund and supporting families, with the aim of making the emirate one of the most liveable cities in the world.

Oil revenues account for 8 per cent of total projected revenues for the fiscal year 2019. Non-tax revenues account for 64 per cent while tax revenues account for 25 per cent and income from investments represents 3 per cent.

Around Dh9.2 billion will be allocated for infrastructure spending in the budget, which will create 2,500 jobs.

Shailesh Dash, board member, Allied Investment Partners, said the Dubai government's budget, like in the last few years, is disciplined and forward-looking. The increased infrastructure spending helps in the growth of various segments of the economy. By keeping the education, healthcare and housing budgets at 33 per cent of the total budget, the government has kept its vision intact.

"The outlook for the UAE economy remains challenging despite the various positive steps taken by the government, many of which are still in the implementation phase. The regional challenges along with the US policies, which include oil prices, trade wars, currency, etc., will have an impact on the UAE economy," he said.

Read More

More Than 2000 New Jobs to Be Created in Dubai in 2019
UAE Markets to Recover in 2019

"Any positive resolutions or implementations of announced policies will have a positive impact on the economy. Based on government policies, infrastructure and the associated industries look to be a good area of growth in the economy," he said.

Salary and wage allowances within the budget account for 32 per cent of total government spending. Public and administrative expenditure as well as grant and support expenditure account for 47 per cent of total government expenditure. These expenditures saw a 5 per cent year-on-year growth.

Spending on the social development sector in the areas of health, education, housing, women and children's care, as well as reading, translation and programming initiatives, represents 33 per cent of total government spending. The government will spend 22 per cent on security, justice and safety.

"Dubai is committed to the continued development of its budget performance over the next few years to ensure financial sustainability and encourage entrepreneurship in the emirate through economic incentives that will contribute to attracting more investments," said Abdulrahman Saleh Al Saleh, director-general of Dubai's Department of Finance (DoF).

Al Saleh further said that the government has been able to achieve an operating surplus of Dh850 million by adopting disciplined financial policies. 

Arif Abdulrahman Ahli, executive director for planning and budgeting sector at the Department of Finance, said the 2019 budget continues to meet the requirements of Dubai Plan 2021 and makes a statement on the emirate's stable financial position.

"We have come up with big initiatives to consolidate development and innovation through the provision of smart collection and smart financing programmes and the development of a financial data platform that will contribute to the availability of financial data for government entities, businesses and individuals," said Jamal Hamid Al Marri, executive director for central accounts sector at Department of Finance.

Atik Munshi, senior partner, Crowe, said Dubai's Dh56.8 billion budget for 2019 is not very different compared to the previous year, though state revenues are expected to increase by a small margin. "The creation of nearly 2,500 new jobs will bring about a positive sentiment," Munshi told Khaleej Times.

The newly-elected president of the Pakistan Business Council (Dubai) Iqbal Dawood called the finance document "a very balanced budget." "The budget seems to be good considering the challenging times globally. The total outlay has been slightly increased and it will help create more jobs in 2019," Dawood said, adding that the government should take some steps to ensure the ease of doing business and reduce costs, especially for re-export businesses as they cannot absorb high costs and transfer this to trading partners abroad.

Surandar Jesrani, managing partner and CEO of Morison MJS Tax Consultancy, said being a precursor budget to Expo 2020, the 2019 budget meets and rather exceeds expectations, inter-alia, from an infrastructure as well as tourism perspective.

"Being a forward-looking and progressive budget, a substantial allocation of budget towards health, education and housing will go a long way in further improving the already high standards of living in Dubai," Jesrani said.

By Waheed Abbas


Copyright © 2019 Khaleej Times. All Rights Reserved.

You may also like