On Sunday, Dubai, the largest financial hub of UAE alongside the Mideast, had approved a budget worth of 57.1 billion dirham or $15.55 billion for 2021 as the economy has been anticipating a sharp turnaround in economic activity alongside a robust pickup in crude oil prices next year, the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, said in a statement earlier in the day.
Nonetheless, as of now, United Arab Emirates alongside Dubai, had been facing off a sheer contraction amid a plunge in crude oil demands alongside a broad-based international travel ban, impacting Dubai’s stance as an international trade route while blocking out a lucrative source of revenue from air traffics.
Although, Dubai’s economy has been far less sensitive to crude oil prices amid a downturn in reserves with roughly 4,000 million barrels of crude oil left onshore and offshore combined, still a swathe of forecasts noting that the US crude futures’ prices would likely to pick up in 2021 and to stay rangebound between $58-$60 per barrel, had ramped up optimisms of an overall growth in Mideast economy, which in turn would be benefitting Dubai’s fiscal footing given its stance as a stronghold of businesses and financial activities in Middle East.
Dubai plans to spend $15.5bn in 2021 budget, 14% down from prior estimate
Despite a deluge of optimisms over a steep turnaround of economic activities next year with a rollout of pandemic vaccine campaigns in a majority of G20 nations including Dubai, UAE, the size of Dubai’s 2021 budget had been slashed by a seventh, below a prior estimate of 66.4 billion dirham forecasted earlier in the year, reflecting growing uncertainties which many analysts had justified by noting that a pandemic’s fiscal fallouts usually spanned between 5 to 10 years with multiple waves alongside mutations that led to several variants which were being observed at this moment.
Nonetheless, the ruler of Dubai had said in the statement that the country was expected to grow by 4 per cent in 2021 following a contraction of 6.2 per cent this year.