A surge in oil prices turned a UAE fiscal deficit in 2010 to a surplus of around Dh71.5 billion in 2011 although public expenditure remained at one of its highest levels, according to a key Western finance organization. The UAE suffered from a deficit in its consolidated financial account (CFA) of around Dh29.5 billion in 2010 as a result of lower oil prices and a sharp rise in spending as part of fiscal stimulus measures adopted by the second largest Arab economy in the wake of the 2008 global financial distress. But a surge of nearly 50 per cent in oil prices allowed the country to rebound into a surplus in 2011, accounting for nearly 5.3 per cent of GDP, the Washington-based Institute of International Finance (IIF) said. The figures, published in the bulletin of National Commercial Bank (NCB) of Saudi Arabia, showed higher oil prices boosted the UAE’s total revenue to Dh443.5 billion in 2011 from Dh315.1 billion in 2010 while oil export earnings shot up to Dh353.5 billion from Dh239.3 billion. Spending swelled to around Dh372.1 billion from Dh344.5 billion. The report showed the UAE would record a surplus of around Dh35.5 billion in 2012 although revenues are projected to fall to Dh416.9 billion because of an expected decline in oil earnings to about Dh314.9 billion. It forecast expenditure to rise slightly to around Dh381.4 billion in 2012.In a recent study, another bank in the Gulf said it expected the UAE fiscal position to bounce back into a surplus through 2011-2012 following shortfalls in the previous two years due to high spending and lower oil prices. “The fiscal position of the UAE remains fairly comfortable. At face value, 2009 and 2010 may have seen the UAE record its first budget deficits since 2003, at eight and one per cent of GDP, respectively,” National Bank of Kuwait said. “But these figures exclude both the income received on the government’s vast overseas assets and profits from the government-owned ADNOC…including these, the budget may not have seen deficits at all.” In another report on the UAE’s consolidated finance account (CFA), which comprises the federal budget and spending by each emirate, the Abu Dhabi-based Arab Monetary Fund (AMF) said UAE revenue in 2009 plunged to around Dh292.6 billion from a record high of Dh450.3 billion in 2008. It said the decline was a result of a sharp fall in hydrocarbon export earnings to nearly Dh217.5 billion last year from a peak of Dh362.1 billion in 2008. Official CFA data in the previous years showed the UAE has recorded massive surpluses. The surplus stood at around Dh75 billion and Dh69 billion in 2006 and 2007 respectively and was achieved despite a steady rise in actual spending.