The United Arab Emirates (UAE) has approved its federal budget for the fiscal year 2026, with both revenues and expenditures estimated at 92.4 billion dirhams ($25.2 billion), signaling the country’s commitment to fiscal stability and economic resilience.
Sheikh Mohammed bin Rashid Al Maktoum © X
The United Arab Emirates (UAE) has approved its federal budget for the fiscal year 2026, with both revenues and expenditures estimated at 92.4 billion dirhams ($25.2 billion), signaling the country’s commitment to fiscal stability and economic resilience.
The announcement was made on Monday by Prime Minister and Ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, in a post on X.
According to the statement, the 2026 budget reflects a balanced approach to public spending and revenue generation, aligning with the UAE’s strategic vision for economic diversification, sustainable development, and social welfare enhancement.
“Today, we approved the Union’s budget for 2026, with estimated revenues of 92.4 billion dirhams and equivalent expenditures,” wrote Sheikh Mohammed. “The UAE continues its journey of sustainable development with strong, stable financial planning.”
A Budget Built on Stability and Growth
The balanced nature of the budget indicates that the UAE does not plan to run a fiscal deficit in 2026, a significant achievement in a global economic environment marked by inflation, geopolitical uncertainty, and energy market volatility.
This move underscores the UAE's prudent fiscal management and its ability to maintain budget discipline while continuing to invest in national development priorities such as healthcare, education, digital transformation, and infrastructure.
While the detailed sectoral allocations of the 2026 budget have not yet been released, historical trends suggest that a significant portion will be dedicated to social services, federal government operations, and strategic economic initiatives tied to the UAE Vision 2031 — the long-term roadmap for transforming the UAE into a global economic and innovation hub.
Dirham Stability and Global Investor Confidence
The budget announcement comes at a time when the UAE dirham remains firmly pegged to the US dollar (1 USD = 3.6729 AED), providing monetary stability and investor confidence in the local economy. The currency peg has served the country well by anchoring inflation expectations and supporting trade and capital flows.
The strong fiscal position of the UAE, coupled with stable oil revenues and an expanding non-oil economy, allows the government to maintain such equilibrium without resorting to borrowing or excessive cuts in public services.
The International Monetary Fund (IMF) and other global financial institutions have consistently praised the UAE for its economic reform agenda, regulatory environment, and successful post-COVID-19 recovery. The country’s GDP growth is forecast to remain robust in 2025–2026, driven by strong performance in sectors such as real estate, tourism, logistics, and technology.
By maintaining a balanced federal budget, the UAE sends a strong signal to international investors and credit rating agencies about its financial discipline and macroeconomic health. The country is currently rated AA- or equivalent by major rating agencies, reflecting low credit risk and a solid economic foundation.
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