Dubai’s government debt, including extra-budgetary obligations, is expected to fall to 56 per cent of the emirate’s GDP this year from 60 per cent in 2013 and 66 per cent in 2009, figures show in the staff report on the IMF 2014 article IV consultation published on 3 July.

The report showed that Dubai government debt is now $29.3bn. Dubai’s total debts, including amounts owed by government-related entities (GREs), are $135.3bn. Dubai’s debts including amounts owed by GREs where government ownership is less than 50 per cent is $142bn.

Dubai’s GDP is estimated at just under $100bn.

The report called for further action to strengthen GREs. The leading GREs are Nakheel, which announced in June that it would pay off all long-term debts in August; the Investment Corporation of Dubai (ICD) and its subsidiaries; Dubai World and its subsidiaries; and Dubai Holding and its subsidiaries.

Amounts owed by Dubai World and its subsidiaries now total $29.6bn. ICD and its subsidiaries owe $20.3bn. Dubai Holding owes $16.1bn.

“Although Dubai’s debt could still become unsustainable under severe shocks, the outlook has improved,” the report said.

Dubai now has a medium-term fiscal framework setting budget targets through to 2017. The targets are not published, the IMF said.

The report called on Dubai’s GREs to coordinate and prioritise planned projects to avoid an exaggerated supply response.

“[IMF] staff recommended that these projects should continue to be executed gradually and in line with expected demand, which will require close coordination and oversight,” the report said. “Care should also be taken to prevent GRE activities from crowding out private-sector activity.

“Moreover, as some GREs are still highly indebted, it will be important to continue managing upcoming debt repayments proactively, including using timely communication to guide market expectations,” the report added.