For the next fiscal year, the federal government intends to borrow a minimum of $23 billion, which includes a $12 billion rollover of bilateral debt. Of this amount, $20 billion are explicitly included in the budgetary documents, and the UAE will provide an extra $3 billion to support the balance of payments.
$19 billion of the borrowing package is set up for foreign exchange reserve bolstering and budget financing. 3.9 billion is set aside in the budget for foreign commercial loans; however, no new debt from foreign banks is expected. Remarkably, no loans from the International Monetary Fund (IMF) are included in this plan.
The administration also anticipates receiving $5 billion in deposits from Saudi Arabia. There aren’t any plans, meanwhile, for additional loans intended especially for fuel imports.
The government’s efforts to manage its financial responsibilities and preserve economic stability are demonstrated by this borrowing policy.
This thorough borrowing strategy takes into account the difficult balancing act of planning for long-term financial sustainability while also satisfying urgent fiscal requirements. Setting aside money for different things, including paying off current debt and getting deposits from friends, shows that there is a calculated strategy in place to uphold development objectives and preserve economic stability.
The government’s choice to forgo fresh loans from international banks and the IMF demonstrates a responsible approach to handling external debt and maintaining financial independence. These steps will be essential in managing economic headwinds and guaranteeing ongoing progress towards budgetary stability and growth as the new fiscal year draws near.
