The UAE is successfully adjusting to the new "lower-for-longer" oil environment, and the government's economic initiatives have been broadly in line with global and regional trends, an International Monetary Fund study has affirmed.
The study, published by the IMF on its website, commends the progress made by the UAE over the past years to "strengthen its medium-term frameworks for fiscal policymaking and risk analysis."
"The federal government has introduced a medium-term budget cycle, spending ceilings are set top-down and spending is presented on a program basis with associated performance indicators," the study added.
Spotlighting the government’s practical and transparent approach toward the global drop in oil prices, the study mentioned that "Abu Dhabi produces an internal medium-term fiscal outlook based on realistic oil price assumptions, which orientates its annual budget process. Dubai has a medium-term fiscal framework with three-year budget targets."
These initiatives have been broadly in line with global and regional trends, the study, which was published as part of the IMF’s series of country reports, said, recommending that a consolidated medium-term fiscal framework (MTFF), which is comprehensive and forward-looking, could set a clear direction for fiscal policy for the country as a whole and better align resource allocation with local and national developments plans underpinned by goals embodied in the Vision 2021.
"High quality of public financial management systems overall is also a key ingredient of an appropriate MTFF. Building on the progress made, both at the local and federal levels, existing fiscal frameworks could be integrated, their coverage expanded, and intergovernmental coordination and fiscal transparency improved."