Vijay Valecha, Chief Investment Officer, Century Financial
The UAE Cabinet has approved Dh292.5 billion in federal expenditure for the period from 2027 to 2029 which is an increase of 28.3% from the previous three year period. This represents an estimated Dh64.5 billion increase in planned spending equivalent to approximately Dh97.5 billion annually over the new three year cycle. The 2027 budget alone stands at Dh90.1 billion, which provides visibility into the government’s near term spending priorities.
Social development and pensions are the largest spending category, receiving Dh34.6 billion, or 38.4% of the 2027 budget. This allocation will sustain government support for healthcare, education, housing and social services, supporting demand for medical providers, educational institutions and essential service suppliers. Government affairs will receive Dh29.1 billion, accounting for 32.3% of expenditure. This will support federal operations and create opportunities for technology, cybersecurity, software and digital-service providers.
Infrastructure and economic resources will receive Dh3 billion, equivalent to 3.4% of the 2027 budget. This will create opportunities for engineering, construction, building materials and facilities management businesses as government projects progress. Meanwhile, Dh5.6 billion or 6.2%, will be allocated to financial assets and investments which would support the government’s investment activities.
Together, social development and government affairs account for Dh63.7 billion, or 70.7% of the 2027 budget. This concentration highlights the government’s focus on public services and the delivery of government functions. Businesses serving these areas will be positioned to benefit from procurement demand, service contracts and project opportunities throughout the 2027–2029 budget cycle.
Hamza Dweik, Head of Trading (MENA), Saxo Bank
The UAE’s federal budget for 2027 to 2029 sends a very positive signal about the country’s economic priorities and its continued focus on improving quality of life. Total expenditure of AED292.5 billion, representing an increase of 28.3% compared with the previous three-year period, provides a substantial medium-term framework for investment in both people and the economy. For 2027 alone, federal expenditure is set at AED90.1 billion.
What is particularly significant is how much of the budget is directed towards areas that have a direct impact on people. Social development and pensions receive AED34.6 billion, equivalent to 38.4% of the 2027 budget, making this the largest allocation. This reinforces the focus on education, healthcare, housing, social services and the overall quality of life and stability of citizens. Investment in these areas can support households today while also strengthening human capital and productivity over the longer term.
At the same time, the budget maintains a broader economic and institutional focus. AED29.1 billion, or 32.3%, is allocated to government affairs, AED17.8 billion, or 19.7%, to federal expenditure, AED5.6 billion, or 6.2%, to financial assets and investments, and AED3 billion, or 3.4%, to infrastructure and economic resources. This balance is important because the benefits of public spending go beyond social support. Investment in infrastructure and economic resources can strengthen the foundations for future growth, while effective government services and investment can support the UAE’s attractiveness to businesses, investors and talent.
The three-year approach is also important. It gives the government a longer planning horizon and aligns with the UAE’s broader objective of using the federal budget as a strategic tool for future readiness, economic growth and improved government services. The Ministry of Finance has also identified digital transformation, global competitiveness and AI-enabled government efficiency among the objectives surrounding the 2027 to 2029 budget cycle.
Overall, this is a constructive budget for the UAE economy. The 28.3% increase in expenditure demonstrates the scale of commitment to maintaining economic momentum while continuing to invest heavily in social development. The combination of spending on people, infrastructure, government capability and investment should help support quality of life while strengthening the foundations for the UAE’s longer-term economic development.
