Dubai unveils budget with slight spending rise
Dubai unveils budget with slight spending rise
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.
IMF urges Lebanon to make ‘immediate and substantial’ fiscal adjustment
- Lebanon’s debt to GDP ratio is the third largest in the world
- Donor states and institutions are looking to Lebanon to implement the reforms in order to release billions of dollars worth of financing pledged at a conference in Paris in April
BEIRUT: Lebanon requires “an immediate and substantial” fiscal adjustment to improve the sustainability of public debt that stood at more than 150 percent of gross domestic product (GDP) at the end of 2017, the IMF executive board said.
An IMF statement released overnight said IMF executive directors agreed with the thrust of a staff appraisal which in February urged Lebanon to immediately anchor its fiscal policy in a consolidation plan that stabilizes debt as a share of GDP and then puts it on a clear downward path.
Lebanon’s debt to GDP ratio is the third largest in the world.
“Directors stressed that an immediate and substantial fiscal adjustment is essential to improve debt sustainability, which will require strong and sustained political commitment,” the IMF executive board statement said.
It reiterated estimates of low economic growth of 1-1.5 percent in 2017 and 2018. “The traditional drivers of growth in Lebanon are subdued with real estate and construction weak and a strong rebound is unlikely soon,” it said.
“Going forward, under current policies growth is projected to gradually increase toward 3 percent over the medium term.”
Lebanon’s economy has been hit by the war in neighboring Syria. Annual growth rates have fallen to between 1 and 2 percent, from between 8 and 10 percent in the four years before the Syrian war. Two former pillars of the economy, Gulf Arab tourism and high-end real estate, have suffered.
Caretaker Prime Minister Saad Hariri has been designated to form a new government following parliamentary elections last month, Lebanon’s first since 2009, and has stressed the need for the state to see through long-delayed economic reforms.
Donor states and institutions are looking to Lebanon to implement the reforms in order to release billions of dollars worth of financing pledged at a conference in Paris in April. In Paris, Hariri promised to reduce the budget deficit as a percentage of GDP by five percent over five years.
The directors “noted that a well-defined fiscal strategy, including a combination of revenue and spending measures, amounting to about 5 percentage points of GDP, is ambitious but necessary” to stabilize public debt and put it on a declining path over the medium term.
They recommended increasing VAT rates, restraining public wages, and gradually eliminating electricity subsidies. Last year the government spent $1.3 billion subsiding the state power provider — 13 percent of primary expenditures.