A qualitative leap: The UAE economy achieves strong financial performance

The UAE Minister of Finance, Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, said that the strong financial performance achieved by the UAE at all levels and the diversification of government revenues reflect the discipline of fiscal policy.

The United Arab Emirates budget recorded a surplus in the year 2022 and an annual growth in revenues of 31.8% in 2022, while the growth rate in expenditures reached 6.1%, reaching about 427.12 billion dirhams.

Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum praised the efforts of the Ministry of Finance in supporting financial leadership and the sustainable development of the country.

He stressed that the fiscal policy contributed to enhancing economic growth and consolidating the competitive business environment, which resulted in the UAE being included in the list of the fastest growing economies in the world during 2022.

Balanced planning

“The UAE government seeks, through balanced financial planning, to diversify the local economy, enhance non-oil government revenues, and diversify sources of government revenues, in addition to employing financial reforms to improve the business environment and attract foreign investments,” Mohammed bin Hadi Al Husseini, Minister of State for Financial Affairs, said.

Expense control

Expenditures rose moderately during the year 2022, with an increase of approximately 24.74 billion dirhams over the year 2021, as a result of the government’s commitment to controlling expenditures, strengthening financial buffers, and focusing on strategic investments and projects in a way that serves the vision of the UAE and achieves comprehensive growth in its economic, social, and environmental dimensions, and in a way that strengthens its orientations towards… employing financial policies to confront the effects of climate change.

The leadership ambition

One of the most important items that reflects the directions of government spending policy in the UAE is the doubling of the net acquisition of non-financial assets, as it achieved during the year 2022 a growth rate estimated at 94.5% compared to the year 2021, which reflects the role of these assets in achieving the national strategic goals and supporting the ambition of the leadership in placing the UAE economy on the list of the best economies in the world, in addition to its contribution to enhancing economic diversification and reducing the impact of government revenues and the local economy on oil price fluctuations.

The UAE achieved a surplus in the overall public finance balance, as the budget achieved a surplus in 2022, and thus this indicator achieved growth, and this exceptional growth is due to the qualitative leap achieved by government revenues, supported by strong local economic activity. Despite the increase in revenues, the country has maintained a rational spending policy, as this surplus will allow for strengthening financial buffers to mitigate the impact of potential financial risks.

The UAE government also continues to implement its strategic plan by investing aimed at enhancing the business environment, providing services of the highest possible quality, and providing maximum levels of social well-being for citizens and everyone residing in the Emirates.

High revenues

“Tax revenues increased in 2022, which reflects the recovery of economic activity in the UAE, in addition to the results of simplifying and digitizing tax procedures, which have an impact on improving the efficiency of tax collection as well as intensifying campaigns,” according to an analysis of the government financial performance of the UAE for the fiscal year 2022.

Tax awareness has a tangible impact on taxpayers’ awareness of the facilities and services provided, which has contributed to enhancing compliance and increasing efficiency.

Other revenues also achieved an increase of 19.33 billion dirhams in 2022, which reflects the stability of the local economy.

As for social contributions, they increased from 13.55 billion dirhams in 2021 to 14.92 billion in 2022 to contribute to achieving the vision of the founding fathers of building an Emirati person capable of pushing the wheel of growth towards new horizons for the sake of the nation’s elevation and prosperity.

The UAE aims to double its GDP

The United Arab Emirates (UAE) raised $1.5 billion in a bond auction, its first foray into foreign debt markets in more than a year. The 10-year security was priced 60 basis points higher than comparable maturity Treasuries, with an order book of more than $6.8 billion.

This bond issue is part of the UAE’s larger financial plan to improve its position as a worldwide center for business and finance in the face of rising regional competition, notably from Saudi Arabia.

Following its debut bond issuance in 2021, the UAE, a federation of seven emirates that includes oil-rich Abu Dhabi and commercial center Dubai, raised $3 billion in June 2022 through another bond offering.

These sales are expected to contribute to the country’s ambitious economic growth targets.

The UAE aims to double its gross domestic product (GDP) to over $800 billion by the end of this decade.