Dubai increases infrastructure spending by 27 per cent

22 December 2016

Government project spending is expected to reach $2.2bn in 2017

Dubai has approved its 2017 budget with expenditure of AED47.3bn ($12.9bn) - a 3 per cent increase on the AED46.1bn budget expenditure for 2016.

The key highlight of the budget is a 27 per cent increase in budgeted infrastructure spending. In 2016 infrastructure spending was budgeted to be AED6.4bn, which implies budgeted spending for 2017 is AED8.1bn - or about 17 per cent of the 2017 budget.

Dubai government spending on infrastructure is supported by government related entities which spend much more than the government each year on construction projects.

Although the budget has an operating surplus of AED2.9bn, it has an overall deficit, “The 2017 budget was adopted with a deficit of AED2.5 billion, representing 0.6 percent of the GDP of the emirate,” said Abdulrahman Saleh al-Saleh, director general, Department of Finance for the Government of Dubai.

Al-Saleh says the deficit is a result of a reclassification of the budget, which was introduced this year, and the increase in infrastructure spending.

Despite the new classification, all types of expenditure have been increased.

Social Development Sector, including health, education, housing and community development, represents 34 percent of the total expenditure with AED16bn, security and justice accounts for 21 per cent of total expenditure with AED9.9bn, and innovation and creativity has 8 per cent with AED3.8bn.

The allocation of salaries and wages represents 33 percent of the total expenditure while general, administrative, grants and support expenditure represent 47 percent of the total expenditure.

The budget for 2017 has also allocated resources for 3,500 new job opportunities.

For revenues, government fees represent 76 percent, tax and customs make up for 16 percent, oil accounts for 6 percent, and government investment returns contribute 2 per cent.

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