Dubai unveils budget with slight spending rise

Updated 01 January 2013
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Dubai unveils budget with slight spending rise

DUBAI: Dubai's government unveiled its budget for 2013 yesterday, setting expenditure at 34.12 billion dirhams ($ 9.3 billion) and a deficit at 0.5 percent of gross domestic product.
Expenditure was forecast only slightly up from 33.68 billion dirhams in this year's budget, while revenues were expected to amount to 32.62 billion dirhams, up from 29.91 billion dirhams in 2012, it said in a statement.
The budget forecast the deficit to drop to 1.48 billion dirhams, compared with 3.778 billion dirhams predicted for this year.
The Dubai government said the focus of the budget was "on a prudent fiscal policy that provides the stimuli necessary to economic growth".
The debt-laden Gulf emirate allocated six percent of spending to debt servicing, while 26 percent would be channeled into health, education, housing and social developments.
Sixteen percent of expenditure has been set aside for the completion of infrastructure and development projects.
Abdul Rahman Al-Saleh, the finance department director general, said the budget emphasized a preference to expand expenditure to support the economy but "without sacrificing the strategic objectives... of reducing the deficit".
Government fees would represent 62 percent of revenues, while customs and taxes on foreign banks would account for 23 percent. Dubai does not impose a tax on income.
Net oil income amounted to 12 percent of total revenues, the statement said.
The government did not release figures for actual revenues and expenditure in 2012.
Dubai's economy contracted 2.4 percent in 2009 when it rattled global markets over its debt crisis before receiving a $ 10-billion bailout from Abu Dhabi, its oil-rich partner in the Emirates, and reaching restructuring deals with lenders.
The economy has since made a comeback, growing 2.8 percent in 2010, 3.4 percent in 2011, and 4.1 percent on an annual basis in the first half of this year, as tourism, trade and transport keep expanding.


Cost of eating out in Saudi Arabia rises at fastest rate in five years

Updated 25 September 2018
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Cost of eating out in Saudi Arabia rises at fastest rate in five years

  • August data reveal sharp uptick in prices in hotel and restaurant sector
  • But price increases in other sectors slow leaving overall inflation rate flat

LONDON: The cost of eating out or enjoying a night’s stay at a hotel in Saudi Arabia increased at the fastest rate recorded in five years last month, according to government statistics.
August’s consumer price data show that restaurant and hotel inflation rose to a new high of 8.4 percent year-on-year in August from 7.6 percent year-on-year in July.
Slower price increases in other categories ensured the headline inflation rate for the Kingdom remained relatively flat, with inflation staying at 2.2 percent year-on-year in August, unchanged from the previous month.
Analysts forecast that the Kingdom’s inflation rate will likely pick up again towards the end of the year.
“We still expect it to rise a little over the rest of this year as underlying price pressures pick up,” said Jason Tuvey, senior emerging markets economist at Capital Economics, on Tuesday in a research note.
Inflation in Saudi Arabia peaked earlier this year at 3 percent following the introduction of the new value-added tax on certain goods and the government-imposed price hikes on the cost of energy at the start of 2018.
Consumer prices are expected to drop again in the new year as the impact of the VAT charge lessens, analysts predict.
“The upshot is that we expect that inflation will fall to around 1 percent year-on-year in January 2019,” said Tuvey in a note.
Food inflation - which represents 20 percent of the basket of goods and services used to calculate the growth rates in consumer prices - edged downwards in August to 6.6 percent year-on-year compared to 6.7 percent in July. 

The cost of food had jumped in July, with vegetables in particular becoming more expensive with inflation hitting 8.1 percent year-on-year compared to a decline of 0.8 percent year-on-year recorded in June.