Spending to rise 12 pct in Dubai's 2016 budget

DUBAI, Dec 27 (Reuters) - Dubai plans to raise state spending by 12 percent in 2016 as it invests in infrastructure to sustain economic growth, but an equal rise in revenues will allow the emirate to balance its budget, the government said on Sunday.

The ruler of Dubai, Sheikh Mohammed bin Rashid al-Maktoum, approved spending next year of 46.1 billion dirhams ($12.6 billion), up from 41.2 billion dirhams in the 2015 budget plan. The 2015 budget featured a 9 percent rise in spending.

It is the second year in a row that Dubai, which came close to defaulting on its debt in 2009 because of a real estate crash, expects to avoid posting a deficit.

Economies in the Gulf, where Dubai is a leading trade and business centre, are slowing because of low oil prices. But the government said it expected to boost its income by 12 percent next year through additional revenue from government services, which would provide 74 percent of total income. It said revenue would increase on the back of strong economic growth and changes to the fees for some services.

Thirty-six percent of state spending would go towards wages and salaries, as the government provided 3,000 new jobs for its citizens. Spending on infrastructure, transport and economic development would rise by slightly more than 12 percent, accounting for 36 percent of all spending, while 5 percent of spending would go to servicing Dubai’s debt. (Reporting by Andrew Torchia. Editing by Jane Merriman)