The UAE Cabinet approves the largest fiscal federal budget for 2025!
When it comes to setting standards, there is no country that does it like the UAE.
With spending projected at an impressive AED 71.5 billion, the UAE continues to reinforce its commitment to supporting key sectors, boosting the economy, and maintaining a balanced fiscal approach.
Let’s break these down…
The balanced approach
The 2025 budget that has been set out reflects both ambition and caution. The Union General Budget Plan is projecting a revenue of AED 71.5 billion, matching the planned spending to keep income and expenses balanced - these include real estate, fintech, new business expansion and more.
This is part of the government’s 2022-2026 financial strategy, aiming for sustainable growth while staying financially responsible.
The economic growth of the UAE
The UAE’s economy has been strong following the pandemic, and this new budget signals it will add continued confidence in that growth.
The country’s GDP expanded by 3.4% in Q1 2024, and experts predict an even stronger growth for 2025. This is largely driven by the non-oil sector, which continues to be a major focus for diversification.
Efforts such as allowing 100% foreign ownership of properties and businesses and ongoing tax reforms have played a crucial role in attracting global investors, setting the non-oil sector on a steady path of growth at 5.3% for 2025.
Where is the fiscal investment going?
The bulk of the budget (about AED 27.86 billion) will be directed towards social development and pensions. This sector, which includes public and higher education, healthcare, social services, and pensions, reflects the government’s commitment to improving the quality of life for its citizens.
More than AED 10 billion has been allocated specifically for public and higher education, while healthcare will see over AED 5.7 billion in funding.
In addition to social development, AED 25.57 billion will be allocated to government affairs, while the infrastructure and economic affairs sector is set to receive AED 2.58 billion. These investments are essential for maintaining the UAE’s infrastructure and supporting ongoing economic projects.
The larger impact on the economy
This federal budget is only a portion of the total governmental spending across the UAE. The individual Emirates, such as Dubai and Sharjah, also manage their own budgets, each of which is similarly breaking records.
Dubai’s total spending for the 2024-2026 fiscal cycle is estimated at AED 246.6 billion, with AED 79.1 billion allocated for 2024 alone. Sharjah too, approved its largest budget ever for 2024 at AED 40.83 billion.
According to experts, the 2025 budget signals an 11.5% increase compared to 2024, equivalent to 2.4% of the GDP next year.
What does this mean for the UAE property market?
This record-breaking budget approval is going to have a positive impact on the UAE property market.
As the UAE continues to focus on improving the economy and attracting foreign investments, we can expect to see increased demand for residential and commercial properties. The expansion of public services, education, and healthcare will also make the country an even more attractive destination for expats and investors alike, driving further growth in the property sector.
This in turn, will result in higher demand for real estate investments across the Emirates, creating a ripple effect that benefits the entire property market.
Thinking about capitalising on Dubai’s growing market - you could get in touch with our in-house experts or take a look at our live listings.