UAE finance ministry to study demands for spending rise

The United Arab Emirates' finance ministry will assess demands to raise federal budget spending in coming weeks and it is not planning to issue a sovereign bond at the moment, an official said on Saturday.

The world's third-largest oil exporter had originally set its 2011 budget with a shortfall of some Dh3 billion ($817 million).

So far, the state has not issued bonds at the federal level, unlike the individual emirates.  

"We have been receiving some of the ministries' and      government entities' requirements and we are studying supporting them in the extra budget requirement," Younis Al Khouri, undersecretary and director general at the UAE Finance Ministry, told Reuters.

He did not say how high the additional demands were, adding the ministry officials were going to meet at the end of May or in early June to assess them.

Asked whether the ministry was planning to issue a federal sovereign bond, Khouri said on the sidelines of a Gulf finance ministers' meeting: "Not now."    

In November, the UAE cabinet approved the 2011 draft budget forecasting expenditure of Dh41 billion, less than the 2010 plan.     

In January, the UAE minister for financial affairs said he expected the country, rated Aa2 by Moody's, to issue its first sovereign bonds toward the end of the year or in early 2012 after its top advisory council passed a new public debt law.      

The federal budget accounts for around 15 per cent of total UAE government expenditure.