Strong oil prices to 'bolster UAE's fiscal position'

18/04/2011 - Dubai Investment News Posted by Neil King
Strong oil prices to 'bolster UAE's fiscal position'

The UAE will see its financial position boosted by a reduction in expenditure and strong growth in oil prices.That is according to National Commercial Bank, which said 2011 will see Abu Dhabi's balance turn positive and Dubai record a lower-than expected budget shortfall.In a study sent to news provider Emirates 24-7, the organisation said Abu Dhabi's projected budget deficit of dh84.9 billion for last year was largely avoided as a result of higher-than expected oil prices.The firm said the estimate was based on oil prices remaining at around $60 per barrel, when in fact prices were nearer to $70 per barrel."Continuing the consolidation trend of 2010, Abu Dhabi intends to balance its books this year. In reality, the fiscal position of the emirate is likely to be significantly stronger since the budget excludes revenues from important state-owned entities, including the Abu Dhabi National Oil Company," the report said."To date, Abu Dhabi appears to have covered its deficits through transfers from government-related entities, mainly ADIA."