Dubai’s economy has seen a robust recovery since the pandemic, with all sectors experiencing exponential growth. As a result, the Dubai Government has successfully paid off over Dh47 billion in debt, according to a new report released on Wednesday.
Global rating agency S&P highlighted that the emirate repaid Dh40 billion in debt during 2022-2023 and an additional Dh7.1 billion in bonds. This significant reduction is expected to bring Dubai’s general government debt down to 34% of its GDP by the end of 2024, compared to 70% in 2021.
S&P noted that the government’s debt repayment included a Dh20-billion loan from Abu Dhabi and the Central Bank of the UAE and Dh7.1 billion in bonds. This debt reduction has been supported by Dubai’s booming economy and strong revenue streams, including the introduction of a 9% corporate tax.
In addition to the tax, the government has monetized several of its assets through IPOs over the past two years, raising approximately Dh33 billion. Major listings included partial sales of Dewa, Salik, Empower, and Tecom. With more companies scheduled to go public, Dubai could see further financial boosts, helping to reduce debt or fund significant projects like airport expansions.
Dubai’s gross government debt is expected to decline further, with S&P predicting fiscal surpluses from 2024 to 2027 and no additional debt issuances during this period. However, funding for large-scale projects such as the Al Maktoum Airport expansion and the Tasreef rainwater drainage system remains uncertain in terms of timing and government participation.
