The UAE’s federal government recorded an AED12.1bn ($3.3bn) deficit in the first quarter of the year, widening by 12.5% y/y, as both revenue and spending contracted, the central bank reported.
Total revenue fell 17% y/y to AED74.9bn while spending dropped 16.4% y/y to AED87bn during Q1.
The federal budget focuses mainly on administrative spending, public services and wages for federal employees.
Tax proceeds shrank 19.4% y/y to AED55bn in Q1. Meanwhile, compensation of state employees jumped 36% y/y to AED14.4bn whereas subsidies dropped 3% y/y to AED0.2bn. It is worth noting that the UAE government removed as of August 1 all energy subsidies to boost fiscal consolidation. The measure will help save up to AED107.3bn annually, according to the IMF estimates.
In 2015, the UAE’s federal state budget is expected to report an AED124bn gap, accounting for 2.9% of the forecast GDP, widening from just AED34bn in 2014. Total revenue will fall 25% to AED287bn while spending will virtually flatten at AED411bn.
The revenue estimates do not take into consideration the proceeds stemming from Abu Dhabi National Oil Company (ADNOC) transfers and government investment income, the c-bank underscored.
US President Donald Trump's December 6 announcement that his administration has decided to unilaterally recognise Jerusalem as Israel's capital was described as “against international law” by ... more
Iranian President Hassan Rouhani on November 21 declared the end of the so-called Islamic State militant and terrorist group following decisive battles in Iraq and Syria. Stating that he wished to ... more
Iran is taking control of oil exports from Iraqi Kurdistan's giant Kirkuk field with Baghdad authorising the move as a reward for the Iranians' help in quelling the Kurds' late September push for ... more