United Arab Emirates: Selected Issues

IMF Staff Country Reports, July 14, 2017

Source details

A consolidated Medium-Term Fiscal Framework (MTFF), which is comprehensive and forward looking, could set a clear direction for fiscal policy for the country as a whole and better align resource allocation with local and national developments plans underpinned by goals embodied in the Vision 2021.
The federal government and the Emirates of Abu Dhabi and Dubai have started using MTFFs to inform their fiscal policy choices, albeit to different degrees.
A disaggregated MTFF approach is referenced among keywords as an element of MTFF design.

High quality of public financial management systems overall is also key ingredient of an appropriate MTFF.
The framework could consider explicitly expenditure needs in critical areas such as education and health care.
Strengthening market infrastructure and market development are highlighted among relevant keywords for fiscal and liquidity management.

Monitoring of contingent liabilities needs to be strengthened, including covering private and public partnerships (PPPs) and government related enterprises (GREs) including their global subsidiaries.
Data sharing across all levels of governments, including the central bank, could also be strengthened.

Keywords emphasize liquidity, liquidity management, liquidity supply, excess reserves, FX swap market, and market risk perception as relevant themes for fiscal and financial policy.
Bond market development, CD issuance, and bank funding are noted among keywords relevant to market creation and bank liquidity.

Consolidate and make forward looking the MTFF at the national level to align resource allocation with Vision 2021 and local development plans.
Improve public financial management quality to support an appropriate MTFF.
Explicitly incorporate expenditure needs for education and health care into the MTFF.
Strengthen monitoring of contingent liabilities, including PPPs and GREs and their global subsidiaries.
Enhance data sharing across all government levels and with the central bank.
Continue development of market infrastructure to support liquidity management and bond/CD markets.

Subjects: Asset and liability management, Banking, Budget planning and preparation, Expenditure, Fiscal policy, Liquidity, Liquidity management, Public financial management (PFM)
Keywords: Abu Dhabi government, bank, bank funding, banks cope, bond market, Budget planning and preparation, CBU, CBU's CD, CD issuance, consolidated Medium-Term Fiscal Framework, CR, disaggregated MTFF approach, emirate government, Emirates government, enhancing fiscal policy coordination mechanism, EU expenditure benchmark, excess reserves, federal government, FX swap market, Global, ISCR, Liquidity, Liquidity management, liquidity market, liquidity supply, market, market creation, market development, market risk perception, MTFF design, strengthening market infrastructure

Source: United Arab Emirates: Selected Issues (IMF Staff Country Report), July 14, 2017.