According to the Minister of Economy, the UAE’s non-oil sector has been busy outclassing the oil industry for the past two years and is likely to achieve an exponential growth rate by 2020. The resilient investment programs to amplify the contribution, specifically in infrastructure, has increased the development rate in UAE.
The government wants to decrease oil reliance by planning an economic diversification and add 20% to the entire GDP and boost non-oil contribution, as averred by Mansouri. He also added that modern infrastructure will not only improve UAE’s investment but will help business to grow with the better legislative framework and enhanced the economic and administrative environment.
With a determined vision and intention, the UAE has established programs for each government entity and the divulged cabinet declaring 2014 as the year of innovation. While Dubai and Sharjah have announced their budgets, the federal budget also focusing on increased expenditure will cover next five years.
Budgeting & Economic Development in UAE
The Minister stated that the investment on strategic planning will further grow this year, 2017. The education, health, water, energy, technology, and transport sectors follow 100 initiatives and are part of an investment program. An estimated amount of Dh300 billion has been allotted specifically.
Dubai has disclosed a budget of Dh47.3 billion last month to create new employment measures for this year.
As the emirate plans for Expo 2020, the construction sector is also promised to receive a major rise from a 27% growth in infrastructure spending.
A 3 percent increase in overall expenditure is shown in the budget, while revenues will drop down due to the restructuring of document proposed by the government. Sharjah income is expected to go as high as 7% compared to last year, this year the total planned expenditure for 2016 is relatively high.
Ministers adopted last year’s federal budget Dh248bn over the next five years, focusing on education, social development, and health, as the country is developing a regional trend of tightening budgets. “Increasing fiscal deficits and private-sector productivity, boosting growth, generating income and increasing taxes, creating a fiscal space that helps solve budgetary problems in the long-term, turning programs vicious circle-funded public investment,” said the minister, how fiscal austerity will reduce public investment, reduce economic growth, and reduce fiscal space and more binding fiscal austerity.
The company expects overall growth in the UAE, which is expected to fall to 2.5 percent this year, down 2.3 percent in the year-ago period, according to the International Monetary Fund.
The federal government maintains its spending in the next five years, despite a fall in oil prices, which consume its main source of income.
The Government has taken a number of measures to strengthen its income without oil and to reduce expenditure. These measures include lifting tariffs on energy products and raising subsidies for natural gas and electricity in the Emirate of Abu Dhabi.
The ministry also strives to promote the participation of small and medium enterprises in the economy and is taking various laws such as investment law to attract more FDI in the country, the minister said.
The outlook for Dubai’s economy is improving, thanks to a stronger than expected recovery in the construction industry.