UAE federal budget: Cabinet approves AED292.5bn plan

The UAE Cabinet has approved a AED292.5 billion ($79.6 billion) federal budget plan for 2027–2029, up 28.3% on the previous three-year cycle, at a meeting chaired by Sheikh Mohammed bin Rashid Al Maktoum.

The 2027 UAE federal budget, the first year of the new cycle, carries estimated expenditure of AED90.1 billion ($24.5 billion). The Cabinet approved both the three-year plan and the 2027 budget on Monday 12 October, the Dubai Media Office said, under Federal Decree-Law No. 26 of 2019 on Public Finance.

The three-year total compares with AED227.1 billion allocated for 2024–2026, according to Arab News. Sheikh Mohammed, Vice President, Prime Minister and Ruler of Dubai, said: “Our priorities are fixed and have not changed: education, health, housing, social services.”

Where the UAE federal budget goes in 2027

Social development and pensions take the largest share, at AED34.6 billion ($9.4 billion) or 38.4% of the 2027 budget. Government affairs receive AED29.1 billion (32.3%), while federal expenses account for AED17.8 billion (19.7%).

Financial investments are allocated AED5.6 billion (6.2%) and infrastructure and economic resources AED3 billion (3.4%). Within the social envelope, public and university education absorbs 18.8% of total spending, healthcare 6.7%, pensions 6.4%, social affairs 4.4% and public services 2.1%, according to the government statement.

Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance, said: “We are not spending simply to meet the needs of today.” He said the plan was designed to raise government efficiency and speed up development projects.

Mohamed bin Hadi Al Hussaini, Minister of State for Financial Affairs, said the new cycle reflected a shift towards greater agility in managing public resources, with artificial intelligence and financial data analytics used in planning.

A smaller 2027 allocation than the record 2026 budget

The 2027 figure is AED2.3 billion, or 2.5%, below the record AED92.4 billion ($25.2 billion) approved for 2026. That budget was itself up 29% from AED71.5 billion in 2025 and was balanced, with revenue projected to match spending.

The dip appears to stem from a smaller financial investments line, which Enterprise calculated had fallen from AED15.4 billion in 2026 to AED5.6 billion for 2027. Excluding that item, the outlet estimated the remaining categories rose about 9.7% year on year. The official statement did not give a revenue estimate for 2027.

Preparation of the cycle began in July 2025. The General Budget Committee, attended by Sheikh Mansour bin Zayed Al Nahyan and Sheikh Maktoum, held its 15th meeting on 30 September to finalise the draft, with a stated focus on simplifying procedures and using AI to improve financial analysis.

What it means for business and investors

The federal budget funds ministries and federal entities; the individual emirates, including Abu Dhabi and Dubai, run their own, larger budgets. Even so, the plan is read as a signal of national priorities. Hamza Dweik, head of trading for MENA at Saxo Bank, told Arab News the budget “sends a very positive signal about the country’s economic priorities”.

The approval comes as forecasters trim near-term projections for the Gulf. Fitch Ratings expects the UAE’s non-oil economy to contract in 2026 before rebounding in 2027, Enterprise reported, which makes sustained public spending on education, health and infrastructure more significant for contractors, healthcare operators and education providers.

The 2027 UAE federal budget will now be issued as federal legislation ahead of the fiscal year, which begins on 1 January 2027. Further detail on individual programmes, including capital projects under the infrastructure and economic resources line, is expected from the Ministry of Finance in the coming months.

Outlook Middle East will follow the allocations as they are rolled out across the UAE and Gulf economy, alongside the latest regional business news. The Cabinet statement is published by the Government of Dubai Media Office.