UAE Cabinet approves deficit-free 2013 budget

DUBAI: The UAE prime minister has announced approval of a 2013 federal budget that is heavy on social spending but without the deficits of the last two years.
“(I) chaired a cabinet meeting where we approved the federal budget for 2013 with total spending: AED 44.6 billion ($ 12.1 billion) and no deficit,” Sheikh Mohammed bin Rashid Al-Maktoum, who is also Dubai’s ruler, wrote on his official Twitter account.
“The budget is part of a three-year government financial plan with total spending of AED 133 billion in order to implement our strategic plans,” he also said in English comments that followed original ones in Arabic.
The state news agency WAM later said the AED 133 billion plan was over the period of 2011-2013.
The UAE federal budget accounts for only around 11 percent of overall fiscal spending in the UAE, with mainly Abu Dhabi and six other individual emirates making up the rest.
Sheikh Mohammed also said that social spending will have the largest share of 51 percent of the budget, while education will account for 22 percent and water and electricity for 12 percent.
“Priorities for the 2013 budget will be: health, education & social benefits for citizens as well as the improvement of government services,” he wrote.
The new budget is larger than the 2012 plan, in which the government of the world’s No. 3 oil exporter pencilled in spending of AED 41.8 billion and a small shortfall of 400 million.
A finance ministry official said earlier this month that the federal budget gap is expected to be around AED 2 billion in 2012 after it swelled to 2.8 billion in the first half and he reiterated that it would be covered from reserves.
In 2011, the OPEC member’s federal budget slipped into a deficit of AED 2.9 billion, according to a June report by the International Monetary Fund based on government data. That was its first gap in seven years.
On an aggregate basis, the UAE and all its emirates together are expected to run a comfortable budget surplus of 6.4 percent of gross domestic product this year, according to a Reuters poll of analysts.
The country booked a consolidated budget surplus of AED 36.2 billion in 2011, or 2.9 percent of 2011 GDP, the finance ministry said earlier in October.