Dubai prepares for budget, may post 2% deficit

Dubai is expected to post a budget deficit of 2 per cent of the GDP in the annual budget to be presented this month. Dhahi Khalfan Tamim, the head of Dubai’s Budget Committee and head of Dubai police added that the deficit worth around Dh300 billion is under prescribed limits and it would not create any problem for the financial system during 2010.

Dhahi Kalfan told, “This was our committee’s recommendation... it is within the healthy position of less than 3 per cent (of GDP).” Earlier, he, while speaking to media persons, declined the possibility of either deficit or surplus adding that if there would be any deficit it would be lower than last year.

The budget is currently under the review of the Supreme Fiscal Committee, which would be then approved by Dubai ruler.

Dubai’s last year budget size was Dh37.7 billion and its fiscal deficit was Dh4.2 billion, representing 1.3 per cent of the emirate’s 2007 GDP.

Government is expected to push public spending in 2010 by 3.4 per cent to Dh43.6 billion in a bid to revive economy, adversely impacted due to volatile market conditions in past.