The UAE on 12 October approved its 2015 federal budget. The budget is balanced, with both spending and revenue projected to increase by 6.3% to Dh49.1bn ($13.4bn at the fixed $1=Dh3.6725 exchange rate) from Dh46.2bn in 2014. With inflation projected at 2.5% in 2015 by the IMF, the net increase in federal spending in real terms would be just under 4%. While this is a touch less than the IMF’s latest UAE growth projection – ie the budget as a share of GDP is set to ease – this benign outlook could quickly change if the recent fall in oil prices (see p20) continues or, indeed, intensifies.

The budget is part of a three-year federal spending plan of Dh140bn ($38.1bn) for 2014-16. The three-year budget first introduced in 2011 intended to achieve sustained growth. (CONTINUED - 748 WORDS)