* Revenue seen rising 7.8 pct
* Spending to increase 6 percent
* Some money to go towards more jobs for local citizens
* Deficit could have been eliminated, but economic stimulus
key
* No word on how deficit to be financed
DUBAI, Dec 31 (Reuters) - Dubai has released a 2013 budget
plan that would raise spending moderately while cutting the size
of its deficit by 18 percent, aiming to balance boosting
economic growth with fixing state finances after its 2009-2010
debt crisis.
Authorities could have eliminated the deficit entirely but
decided instead to increase state spending in order to fund
welfare and infrastructure projects, Abdulrahman al-Saleh,
director general of the department of finance, said on Monday.
Saleh said that by cutting the annual deficit to below 0.5
percent of gross domestic product, the 2013 budget demonstrated
Dubai's commitment to balancing its budget over time.
The emirate is still recovering from a 2009-2010 property
market crash that forced state-linked companies to restructure
billions of dollars of debt, and was only brought under control
when Dubai got $10 billion of aid from neighbouring Abu Dhabi.
Revenue is projected at 32.62 billion dirhams ($8.89
billion) in 2013, up 7.8 percent from the 2012 budget plan. Tax
revenues are expected to jump 15 percent because of a strong
economy; allocations to revenue from government enterprises are
being cut to allow for more reinvestment in the economy.
Dubai's property market has started to recover this year and
economic growth was strong, easing pressure on state finances,
and a plunge of the yields on bonds issued in the emirate showed
increasing investor confidence.
But Dubai must be careful to retain the trust of the markets
since the International Monetary Fund estimates its
government-linked entities will need to repay about $9.4 billion
of maturing bonds and syndicated loans in 2013, and $31.0
billion in 2014 - a refinancing task which the IMF calls "a
challenge".
State spending is expected to rise 6 percent in 2013 to
34.12 billion dirhams. The government said 39 percent of its
spending would go towards salaries and wages, partly because it
would create a further 1,600 jobs for local citizens. Reducing
unemployment in the local population, in an economy where most
work is done by foreigners, is a top policy goal.
The budget deficit is to total 1.5 billion dirhams. The
government said its 2013 plan included an operating budget
surplus, excluding one-off items, of 204 million dirhams.
The statement on the budget plan did not say if Dubai would
issue government bonds to finance the deficit. In September,
Saleh said Dubai planned to sell a bond to refinance part of 6.5
billion dirhams of sovereign debt maturing in April 2013.
Most of the UAE's state expenditures are conducted by the
seven individual emirates rather than the federal government,
with Dubai accounting for about 10 percent of the total. Abu
Dhabi is larger and richer than Dubai because of its oil wealth.
(Reporting by Andrew Torchia; Editing by Susan Fenton)