Dubai Govts Latest Budget (Dh46.1b) to Boost both Growth and Job

, Finance

In the budget announced last Sunday, his Highness Shaikh Mohammed bin Rashid Al Maktoum, the Vice President and Prime Minister of the UAE and Ruler of Dubai, gave the nod to the budget with 12 per cent more state spending as compared to the approved spending of Dh 41.177 billion for 2015.

Let’s see how this latest budget promises to affect the growth rates and the job prospects in this article.

In fact, analysts, financial experts and the industrywallahs have welcomed the second back-to-back budget with the zero-deficit. The government spending on the infrastructure, transport and economic development is expected to rise by a little more than 12 percent.

This claims to be a landmark budget. It shows how much the Emirates well-thought policy of diversification from oil into trading, services and hospitality has worked wonders. Analysts claim that there will be an operational surplus of close to Dh3.4 billion. This budget targets the creation of 3,000 new jobs and will provide the much-needed stimulus for boosting job growth and economic development simultaneously.

The back story…

Analysts say that the break-even point between government revenues and expenditures have happened due to prudent financial policies followed in the UAE. The reason for this is enhanced spending on key sectors such as infrastructure, communications, security, justice, safety, government services, excellence and social development.

It also belies the popular accepted opinion that the 2016 budget does a good mix of careful spending with extensive support for investment incentives. Another important reason is that oil is now only six per cent of the Dubai government’s revenues. That means that there is a marked shift in popular perception and ground realities. Oil has always been the major source of income for the Gulf countries so reducing that dependency does speak a lot towards the economic condition and change there.

Reducing oil dependency can only mean good news since the strategy of diversification into trading, services and hospitality has helped change the fortunes of the country in general and the economy in specific.

Why is this budget being lauded?

The 2016 budget is good news for the country since it represents fiscal prudence combined with extensive support for investment incentives. A push for careful spending combined with thrust for economic development will augur well for the economy.

It is a straight forward looking budget and the pundits claim that constant investment in infrastructure and social sectors show a good strategy as far as good economics is concerned. Increase in budget spends are always good and when these spends are in the key sectors of healthcare, tourism, logistics and education. This means that there would be more job creation in these sectors. This would mean more revenue for the economy and more income for the work-force. Investment in key sectors will also push the job creation and improvement in infrastructure will have an escalating effect on the economy at large.

So, the verdict is that it is a forward-looking budget and will mean more income and revenue for the economy and its people.

Leave a Reply