2024-04-17 22:00:11
Mustafa Abdel Azim (Dubai)
The International Monetary Fund expects that the UAE’s initial general budget will achieve a strong surplus during the current year 2024, exceeding 5.2% of the gross domestic product, and it is likely that the budget will maintain recording high surpluses until 2029, with an average equivalent to about 4% of the GDP annually.
In the “Fiscal Monitor” report, which it issues twice in April and October of each year, the Fund draws positive prospects for public finances in the UAE for the next five years, in terms of budget, revenues, spending, public debt management, and various financial indicators.
According to the data of the report, which studies and analyzes the latest developments in public finance at the international level, the primary general budget surplus recorded in 2023, amounting to 6.9% of output, is the second highest average surplus during the past ten years, after the surplus recorded in 2022, which was equal to about 10.4% of output.
According to the data of the April version of the “Fiscal Monitor” report, the UAE’s initial budget is expected to achieve a surplus equivalent to 4.7% of GDP during the next year 2025, equivalent to about 4.5% in 2026, about 4.2% in 2027, and about 4% in 2028. And about 3.8% in 2029.
According to the data of the report launched by the Fund on the sidelines of the spring meetings of the Monetary Fund and the World Bank in Washington, public revenues are expected to constitute about 31.2% of GDP during the current year, compared to 32.2% in 2023, and to maintain a high level of approximately 30%. % of output until 2028.
The data indicate that public revenues are expected to be equivalent to about 30.7% of the output during the next year, 2025, about 30.4% in 2026, about 29.9% in 2027, about 29.6% in 2028, and about 29.3% in 2029.
In terms of general government spending, the Fund expects that the UAE will maintain stable levels of public spending for the next five years, exceeding about 26% of the gross domestic product, and it is likely that public spending will be equivalent to about 26.6% of the GDP during the current year, compared to 25.9%. In 2023, which indicates a noticeable increase in public spending this year.
The Fund expected that public spending would be equivalent to about 26.7% of the GDP next year, 2025, and that it would be equivalent to about 26.6% of the GDP in 2026, about 26.4% of the GDP in 2027, about 26.3% in 2028, and about 26.2% in 2020. 2029. The Fund expects that the state will maintain a moderate level of public debt during the period from 2024 to 2029, and that the debt will decline during the current year to constitute about 30.3% of GDP, compared to 30.9% in 2023, then it will decrease to 30.1% of GDP in In 2026, to 29.7% in 2027, to 29.3% in 2028, and to 28.8% in 2029.
The report’s forecasts are based on the same database used in the World Economic Outlook and the Global Financial Stability Report. The IMF’s individual country economists prepare fiscal forecasts for these countries, assuming that announced policies will be implemented in accordance with the guidelines established for the World Economic Outlook.
The Fund’s expectations for public financial indicators came two days after its expectations contained in the World Economic Outlook report, which suggested that the real GDP of the UAE would grow during the current year at a rate of 3.5% before rising to 4.2% next year, supported by the accelerated pace of growth of non-oil sectors. It is expected that oil production will increase in 2025, and that inflation in the UAE will decrease during 2024 to 2.1% and to 2% in 2025.
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