UAE swings into $11 billion fiscal surplus in 2011: IMF
Baku, June 11 (AZERTAC). The United Arab Emirates' public finances swung into a surplus of 2.9 percent of economic output in 2011 after two years of deficits as robust oil income offset an increase in government spending, a report by the International Monetary Fund showed.
The world's No. 3 oil exporter booked a consolidated fiscal surplus of 38.6 billion dirhams ($10.5 billion) compared with a deficit of 23.0 billion, or 2.1 percent of gross domestic product, in 2010, according to Reuters calculations based on IMF estimates and government data.
However, the 2011 surplus was only a fraction of fiscal surpluses enjoyed before the global financial crisis. They averaged 167 billion dirhams annually in 2006-2008.
The data consolidate the accounts of the federal government with those of Abu Dhabi and Dubai, the two largest emirates in the seven-member UAE, as well as Sharjah.
The government has not yet released consolidated figures for 2011. Oil-rich Abu Dhabi, which accounts for around 78 percent of overall spending in the UAE, does not publish its yearly budget plans and outcomes.
Government spending in the UAE, the second largest Arab economy, surged over 19 percent to an estimated all-time high of 401.5 billion dirhams in 2011, according to the IMF. That was nearly 56 percent above the 2008 level.
Unlike other countries in the Middle East, the UAE has not been hit by the wave of social unrest which started last year, but it has raised public spending to avert tensions. It has a cradle-to-grave welfare system and its per capita income of $48,200 is one of the highest in the world.
The UAE's spending on economic development rose 5 percent to 37.3 billion dirhams in 2011, while spending on subsidies and transfers jumped over 31 percent to an estimated 53.9 billion.
The country's dependence on income from hydrocarbons has risen considerably since 2008. The IMF has estimated the oil price which the UAE needs to balance its budget jumped to $84 per barrel this year from $23 in 2008.
A Reuters poll of analysts in March forecast the UAE would post a consolidated budget surplus of 5.9 percent of GDP in 2012. But a recent fall of the oil price could prevent that estimate from being reached; Brent crude is now around $99, having dropped from above $125 early this year.
In Abu Dhabi alone, the budget is estimated to have remained in deficit for the third year in a row. However, the gap halved from the previous year to 33.8 billion dirhams in 2011, the IMF report showed.
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