UAE cabinet approves federal budget for 2023-2026

The United Arab Emirates government approved the federal budget for the fiscal years 2023-2026 on Monday, with a total expenditure of 252.3 billion dirhams ($68.69 billion).

Total revenue over the period is estimated at 255.7 billion dirhams, marginally more than spending. In 2023, revenue is seen to grow 11 percent while spending will increase just under 4 percent. Total revenue in 2023 is projected at 63.6 billion dirhams, and expenditure is estimated at 63.1 billion dirhams, according to a statement.

“The Federal Budget is a major driver of the government’s development ambitions and plans,” Prime Minister Sheikh Mohammed bin Rashid Al Maktoum said following a cabinet meeting.

The UAE is in a more comfortable position to increase spending on the back of supportive oil prices and a rebound in economic growth post pandemic.

While individual emirates like Abu Dhabi and Dubai set their own budgets, there has been increasing focus on federal financing over the past year. The UAE issued $4 billion in debut federal bonds in October last year, not long after Sheikh Maktoum bin Mohammed bin Rashid, son of the prime minister, took over the finance ministry portfolio.

Just under 40 percent of the 2023 budget is allocated to social development and benefits, the largest proportion of any sector, although below the 41 percent earmarked for the same sector in 2022.

Last year, the cabinet approved a $79 billion budget for the 2022-26 period, the largest five-year federal budget, with a strong focus on the development of sectors such as healthcare, education and pensions.

President Sheikh Mohammed bin Zayed Al Nahyan, who took over in May after the passing of his brother Sheikh Khalifa, has already approved several social benefits packages for citizens to address the rising costs of living and support economic recovery.

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