UAE posts Dhs9.75 billion budget surplus in the first half of 2020 - GulfToday

UAE posts Dhs9.75 billion budget surplus in the first half of 2020

UAE-Dirham

The UAE Cabinet approved a zero-deficit federal budget of Dhs61.354 billion for 2020. File/WAM

The UAE federal government posted a budget surplus of Dhs9.75 billion in first half (H1) of this year. According to the figures, the budget posted a surplus of Dhs1.8 billion by the end of the first quarter (Q1) and Dhs7.95 billion in second quarter (Q2).

The total expenditures of UAE federal government bodies reached Dhs24.997 billion by the end of the second quarter of 2020, while the total revenues stood at Dhs34.744 billion, the Ministry of Finance (MoF) said.

The report puts the total revenues at Dhs34,744,272,796, which results in a total surplus of around Dhs9.75 billion in the fist half of 2020.

The total expenditure of the UAE federal government amounted to AED24,997,691,014 by the end of Q2, 2020, according to the Budget Execution Report, released by the Ministry of Finance.

In further detail, the Ministry of Finance’s revenues by the end of the second quarter hit Dhs19,451,573, while those of the Ministry of Human Resources and Emiratisation stood at Dhs1,989,723,992 and the Ministry of Infrastructure Development at Dhs5,462,148.

In terms of expenses, the Ministry of Education spent Dhs2,976,512,604, while the Ministry of Health and Prevention’s total expenditure hit Dhs2,122,562,217. The Ministry of Community Development logged Dhs1,531,603,326 in expenses; Dhs362,417,078 for the Ministry of Human Resources and Emiratisation; and Dhs295,411,082 for the Ministry of Infrastructure development

In detail, the revenues generated by the Ministry of Human Resources and Emiratisation amounted to Dhs1.99 billion during the second quarter of this year. The report shows that other federal revenues stood at Dhs16.572 billion.

On spending, the Ministry of Education’s spending was Dhs2.976 billion, while other federal expenditures stood at Dh8.256. The expenditures of the Ministry of Health amounted to Dhs2.122 billion, while the Ministry of Community Development’s spending stood at Dhs1.532.

The expenditures of the Ministry of Human Resources touched Dhs362.4 million, while the Ministry of Infrastructure Development’s spending was at Dhs295 million.

The UAE Cabinet approved a zero-deficit federal budget of Dhs61.354 billion for 2020, the largest budget ever since the founding of the UAE.

Earlier the Board of the Central Bank of the UAE (CBUAE) has decided on additional measures within the Targeted Economic Support Scheme (TESS) launched initially in March 2020 to further enhance the capacity of the banking sector to support the economy.

A press statement issued by the Bank said that these measures consist into reviewing the existing thresholds of two prudential ratios: the Net Stable Funding Ratio (NSFR) and the Advances to Stable Resources Ratio (ASRR) by temporarily relaxing the requirements for the structural liquidity position of banks.

This step comes as an additional measure encouraging banks to strengthen the implementation of the TESS and support their impacted customers in overcoming the repercussions of COVID-19 pandemic. The changes affect the Net Stable Funding Ratio that is mandatory for the five largest UAE banks, and the Advances to Stable Resources Ratio, which is applicable to all other banks, including foreign branches.

The purpose of those ratios is to ensure that long-term assets are funded by stable resources of funding. The relaxation of NSFR and ASRR will provide banks with enhanced flexibility in managing their balance sheets. The mandatory threshold will be temporarily relaxed by 10 percentage points for both ratios. For the NSFR ratio, banks will be allowed to go below the 100 per cent threshold, but not lower than 90 per cent. For the ASRR ratio, banks will be allowed to go above the 100 per cent threshold, but not higher than 110 per cent. These measures will be effective until Dec.31, 2021.

Meanwhile in March 2020 Sheikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance, has issued Financial Circular No.03 of 2020 regarding the commencements of drafting the UAE’s Federal Budget for the fiscal year 2021.

The circular was issued as part of the Ministry of Finance’s objectives to bolster the government’s financial planning, budget implementation, increase efficiency, as well as to manage finances and cash flows.

According to a statement issued by the Ministry, the circular sets 19th April 2020 as the submission deadline of the 2021 draft budgets.

Sheikh Hamdan said, “The MoF is preparing the draft budget, in accordance with international best practices, and in a manner that optimises the use of government financial resources.”

WAM

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