The emirate of Abu Dhabi will pay the cost of the United Arab Emirates' decision to hike minimum pensions of former military and federal government employees to 10,000 dirhams ($2,700) per month, a senior government official was quoted as saying on Wednesday.

The number of beneficiaries of the hike, granted by President Sheikh Khalifa bin Zayed Al-Nahayan on Monday, will exceed 7,000, Younis Al-Khouri, undersecretary and director general at the UAE finance ministry, told Arabic language daily Al-Bayan.

Al-Khouri also said the total cost of the hike would be paid by the emirate of Abu Dhabi, adding that the Ministry of Finance would implement the increase effective from the end of January.

State news agency Wam reported the hike but did not state the reasons behind the move, the previous size of the pensions, or the number of pensioners benefitting.

Abu Dhabi, the richest of the UAE's seven emirates, accounts for over half its economic output and provided at least $10 billion in aid to Dubai to help repair the damage of Dubai's debt crisis in 2009. - Reuters