Dubai's government plans to increase public expenditure by around 20 per cent in 2009 to stimulate the service-based economy, the Financial Times quoted a senior policy-maker as saying on Saturday.

Nasser Al-Shaikh, director-general of Dubai's finance department said it would increase from some Dh30 billion ($8.17 billion) that was budgeted for public spending in 2008.

'The role of government is to increase spending during challenging times and provide a stimulus to the economy,' Shaikh told the paper.

Dubai has slashed by around half its economic growth projection for 2009 to between 4 to 6, Shaikh said in remarks published on Thursday.

Shaikh is a member of a Dubai committee set up to respond to a financial crisis that has shaken investor sentiment and heightened concerns about transparency in the emirate.

Dubai's sovereign debt stands at $10 billion while the debts of state-affiliated firms amount to $70 billion, Mohamed Alabbar, a member of Dubai's ruling council and chairman of Emaar Properties said in November.-Reuters