UAE Approves Federal Budget of $19.47 Billion for 2025

The UAE Cabinet, chaired by H H Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, on Tuesday approved the federal general budget plan totalling $19.47 billion for the fiscal year 2025.

The revenues in the budget, which reflected the strength of the UAE economy and sustainability of resources, has been $19.47 billion and an equal amount in estimated expenditures, maintaining a balanced approach between income and spending.

This federal budget represents the largest in the UAE’s history, underscoring the robustness of the national economy and the sustainability of resources to support key developmental, economic, and social projects. The approval of the 2025 budget is part of the multi-year financial plan (2022-2026).

The federal budget for 2024 was $17.44 billion, 1.6% more than the budget for the previous year ($17.17 billion). In 2022, the UAE’s total federal budget for the years 2023 to 26 stood at $68.69 billion.

Budgetary Allocations

The 2025 budget is allocated across key sectors, including Social Development and Pensions, Government Affairs, Infrastructure and Economic Affairs, and Financial Investments, alongside other federal expenses.

The Social Development and Pension Sector has been allocated $7.58 billion, representing 39% of the total federal budget and of this amount, $2.97 billion (15.3%) is earmarked for public and higher education programmes, $1.56 billion (8%) to healthcare and community prevention services.

The Government Affairs sector has been allocated $6.96 billion, accounting for 35.7% of the total budget. The Infrastructure and Economic Affairs sector has been allocated $160 million, representing 3.6% of the total budget, while $78 million (4%) has been designated for the Financial Investments sector. Additionally, $3.44 billion (17.7%) has been set aside for other federal expenditures.

Sukuk Issuance

It may be recalled that the Ministry of Finance, as the issuing authority, in collaboration with the Central Bank of the UAE (CBUAE) as the issuing and paying agent, announced the results of the $300 million Islamic Treasury Sukuk (T-Sukuk) auction, which is part of the Islamic T-Sukuk issuance programme for August 2024.

The auction witnessed a strong demand through the eight primary dealers for the May 2026 and May 2027 tranches of the Islamic T-Sukuk, with bids received worth $1.72 billion, oversubscribing the issuance by 5.7 times.

The success is reflected in the attractive market driven prices, with a Yield to Maturity (YTM) of 4.04% on the May 2026 tranche and 3.88% on the May 2027 tranche, representing a 0 to 9 bps above US Treasuries with similar maturities at the time of the auction.

The Islamic T-Sukuk issuance programme will contribute to building the UAE dirham denominated yield curve, providing safe investment alternatives for investors, strengthening the local debt capital market, developing the investment environment, as well as supporting sustainable economic growth.