Dubai 2020 budget sets record spending to boost growth ahead of Expo
DUBAI (Reuters) - Dubai expects to substantially increase state spending next year to stimulate the emirate's economy and support the Expo 2020 world fair, according to the 2020 budget released on Sunday.
State spending will increase by 17% to a record 66.4 billion dirhams ($18.1 billion), compared with the original budget plan of 56.8 billion dirhams for 2019, state news agency WAM reported.
Budgeted infrastructure spending will drop for a second consecutive year in 2020, this time to 8 billion dirhams, as the emirate nears the start of Expo 2020.
The government has spent heavily in preparation of the six-month-long World's Fair, which starts in October, although it tapered its investment as associated projects were completed.
State revenues are projected to increase 25% to 64 billion dirhams, despite previous decisions to cut and freeze some fees for businesses to increase investment. Revenues were projected to grow by just 1.2% in the 2019 budget.
Dubai earlier projected its economy will grow 3.2% in 2020, faster than the 2.1% growth in 2019. It grew by 1.94% in 2018, its slowest pace since a contraction in 2009 when the economy was hobbled by a debt crisis.
Dubai - with a diversified trade and tourism economy and one of the seven territories of the United Arab Emirates - is banking on Expo to boost economic activity.
Dubai, which does not have vast oil wealth, has faced a real estate market downturn since prices peaked in 2014, following a recovery in the aftermath of a property crash in 2009.
Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum also adopted a three-year budget cycle from 2020 to 2022 with total expenditure of 196 billion dirhams.
($1 = 3.6730 UAE dirham)
(Reporting by Asma Alsharif and Saeed Azhar, additional writing by Alexander Cornwll, Editing by William Maclean and Louise Heavens)