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UAE approves 2023-2026 budget; spending up 4% to $69bn

Sharjah is the third most populous city in the United Arab Emirates, after Dubai and Abu Dhabi yet has a larger growing number of millionaires than any of the emirates Creative Commons

The United Arab Emirates government approved the federal budget for 2023 to 2026 on Monday, with a total expenditure of AED 252.3 billion ($68.69bn).

Total revenue over the period is estimated at AED 255.7bn, marginally more than spending. In 2023, revenue is seen to grow 11 percent while spending will increase just under four percent. Total revenue in 2023 is projected at AED 63.6bn, and expenditure is estimated at AED 63.1bn, according to a statement.

“The federal budget is a major driver of the government’s development ambitions and plans,” Prime Minister Sheikh Mohammed bin Rashid Al Maktoum said following a cabinet meeting.

The UAE is in a more comfortable position to increase spending on the back of supportive oil prices and a rebound in economic growth post pandemic.

While individual emirates such as Abu Dhabi and Dubai set their own budgets, there has been increasing focus on federal financing over the past year. The UAE issued $4bn in debut federal bonds in October last year, not long after Sheikh Maktoum bin Mohammed bin Rashid, son of the prime minister, took over the finance ministry portfolio.

Just under 40 percent of the 2023 budget is allocated to social development and benefits, the largest proportion of any sector, although below the 41 percent earmarked for the same sector in 2022.

Last year, the cabinet approved a $79bn budget for the 2022-26 period, the largest five-year federal budget, with a strong focus on the development of sectors such as healthcare, education and pensions.

President Sheikh Mohammed bin Zayed Al Nahyan, who took over in May after the passing of his brother Sheikh Khalifa, has already approved several social benefits packages for citizens to address the rising costs of living and support economic recovery.