Dubai is expecting a deficit-free budget next year as the emirate moves to slash its operational expenses. It is also planning to decrease its fees to further stimulate the economy but is not contemplating any salary cuts for government employees, Emirates Business has learnt.

According to Nasser bin Hassan Al Shaikh, former director-general of Dubai Department of Finance, Dubai has incurred a Dh4.2 billion deficit this year because of its decision to push all its infrastructure projects.

Talking to Emirates Business before his appointment as Deputy Director of Foreign Affairs at Dubai Ruler’s Court, he said the deficit, which has been the result of increased public spending (Dh37.7bn) at a time when non-oil GDP growth is slowing and the price of oil is at low levels, is only 1.3 per cent of the emirate’s overall GDP and is thus manageable.

“The number is manageable. Anything at three per cent or below is within the global benchmark, this is the acceptable standard as stated by World Bank and IMF.”

“Most probably we will be running a balanced actual budget by the end of the year,” he said. “And if we keep seeing the same trends that we witnessed in the first three months – revenues have not been affected, expenditures have dropped on the operations side – we shall have no deficit next year.”

Al Shaikh said Dubai is maintaining its policy of not increasing any government fees to further stimulate the economy. “To the contrary we are looking at the possibility of reducing some of the fees,” he added.

The government has also no plans to cut the pay of its employees. “The government has no plans of doing it,” he said. “This is something that His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, has been very clear about. The government is not considering any layoffs and is not considering revising its pay scales.”

Source: Emirates Business

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