Dubai has unveiled its plan to cut its budget to $ 15.5 billion in 2021 after its economy was hit by a slump in tourism and other sectors amid the novel coronavirus pandemic.
The emirate, one of seven that make up the United Arab Emirates, had published a record budget of $ 18.1 billion for 2020.
“The newly announced budget takes into account the exceptional economic conditions of fiscal year 2020 and the repercussions of the Covid-19 pandemic on the global economy,” said a statement from the Dubai Media Office.
Dubai forecasts a deficit for the fifth year in a row, of $ 1.3 billion in 2021. In 2019, it had forecast a deficit of $ 700 million for this year.
The emirate, which relies heavily on tourism and retail services, closed its border for several months due to the pandemic, causing a 10.8 percent drop in GDP in the first half of the year.
According to government estimates released earlier this week, the economy is likely to contract 6.2 percent this year, but is expected to see growth of four percent in 2021.
The new budget “confirms Dubai’s ability to cope with the crisis, restore the pace of economic growth, strengthen social benefits and essential services,” the media office said.
The government was counting on the six-month Dubai Expo 2020 world trade fair, which was scheduled for October but postponed a year, to attract millions of visitors.
Tourism has long been an economic mainstay of Dubai, welcoming more than 16 million visitors last year. Before the pandemic, the goal was to reach 20 million this year.
Dubai is known for its skyscrapers, including the world’s tallest building, Burj Khalifa, but its key real estate sector has been affected since 2014 by falling oil prices.