Dubai boosts spending by Dh6bn in 2011: IMF

Dubai, the second largest UAE emirate, boosted spending by nearly Dhsix billion in 2011 and the bulk of the increase was in current expenditure and interest payments, according to the International Monetary Fund (IMF).

The increase widened the emirate’s fiscal deficit despite growth in its revenue, including hydrocarbon sales and other earnings, the Fund said.

From Dh53.5 billion in 2010, public spending swelled to around Dh59.9 billion in 2011, the second highest level after the 2009 record spending of Dh91.9 billion.

Current spending grew to Dh31.7 billion from Dh29.4 billion mainly because of an increase in wages and salaries to Dh11.16 billion from Dh10.88 billion.

Interest payments also surged to around Dh7.21 billion from Dh5.65 billion, the Washington-based IMF said in its latest report on the UAE.

The rise in current expenditure was at the expense of development spending, which declined to about Dhseven billion from Dh8.8 billion.

The report showed actual revenue rose to a record high of around Dh42.2 billion in 2011 from Dh40.8 billion in 2010 after an increase in oil income to Dh5.47 billion from Dh5.01 billion. “Other” earnings surged to Dh18.2 billion from Dh15.9 billion, according to the IMF, which did not specify those earnings.

The report showed higher spending widened Dubai’s fiscal shortfall to Dh17.3 billion last year from Dh12.6 billion in 2010. But the 2011 gap remained a fraction of the 2009 record deficit of Dh51.4 billion.

Dubai had suffered from fiscal deficits since 2007 while it recorded surpluses in the previous three years, the figures showed.

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