Dubai to Cut Spending to Save $1 Billion This Year

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Dubai ordered government departments to cut spending this year to reduce the size of the emirate’s planned 6 billion dirham ($1.6 billion) deficit, the department of finance said.

Departments were told to reduce spending by 15 percent to save about $1 billion and narrow the emirate’s planned budget deficit, a spokeswoman at the department of finance said in response to e-mailed questions.

The government said Jan.7 that it expects to run a budget deficit for a second year in 2010 even after cutting spending by 6.1 percent. The economy has been battered by the global crisis as credit markets seized up, trade declined and real estate prices plummeted. The slowdown forced Dubai World, one of the emirate’s three main state-owned business groups, to seek a delay on $26 billion in debt payments. The emirate received $20 billion in financial support last year from the Abu Dhabi government and the U.A.E. central bank.