According to Maratheftis, economic growth in Saudi Arabia will slow to 2 per cent in 2009, while in Qatar growth is expected to be 4.5 per cent.

“The overall view is that the region is not immune from what is happening in the global economy, but will maintain a positive rate of growth which not many others will achieve next year,” he says.

Recent injections of liquidity by governments and lower interest rates will add to inflation he says, although it is not expected to filter through for another four years.

Standard Chartered is predicting that UAE inflation will drop to 9 per cent in 2009 from 12.5 per cent in 2008.

Standard Chartered’s regional chief executive officer Shayne Nelson adds that the extension of the Central Bank of the UAE’s guarantee of savings and deposits to cover international banks with a strong presence in the UAE was a welcome move to help stimulate the banking sector.

“It is a very good boost for the financial system in the UAE,” says Nelson.

“Interbank liquidity has become very tight in the domestic market but I think interbank lending rates could start to come down following the latest central bank moves.”