The UAE Government is on course to balance its budget after spending about half its projected Dh43.6 billion (US$11.87bn) annual appropriation in the first six months of the year, a top official says. A rise in receipts from Federal Government ministries compared with last year contributed to improved revenue, said Younis al Khoori, the director general of the Ministry of Finance. "In the first six months we have almost executed what was requested by the Federal Government for the year," he said.
In addition to contributions from the individual emirates and receipts from Federal Government ministries, the national budget also receives dividends from Government investments. "These are the three main sources of our revenue," Mr al Khoori said. "The slight increase was from the government fees. As long as we have a consolidated revenue increase, we have an increase." Although the present UAE budget is 3.4 per cent larger than last year's, the increase was smaller than in the years leading up to the global financial crisis.
Before the budget was approved last year, the ministry said 22.5 per cent of funds would be spent on education and 17.5 per cent on infrastructure projects. Saeed Rashid al Yateem, the acting executive director of budget and revenue at the ministry, said the budget would be balanced by the end of the year, without specifying the oil price on which the ministry had based its calculations. The budget has been balanced for the five previous years.
A resurgence in oil prices from last year has helped to replenish Government reserves depleted during the global financial crisis. Close to the peak of the crisis in late 2008, the Ministry of Finance announced a plan to set up a Dh70bn support facility for banks. Dh20bn of that amount remained untouched, Mr al Khoori said. This year will be the last time the ministry releases a budget on an annual basis. From next year, it will move to developing budgets lasting three years as it looks to extend its longer-term planning for economic growth and infrastructure projects.
"The Ministry of Finance has started its budget preparation for the years 2011 to 2013," Mr al Khoori said. "We are in the final stages of agreeing a budget cap for the 2011 up to 2013." Although the budget would run for three years, it would include annual expenditure and revenue plans and be open to adjustment if there was a decline or increase in revenue during the period, Mr al Yateem said. tarnold@thenational.ae