The UAE has lowered 2010 growth forecast to 2.5 per cent from 3.2 per cent, according to the country’s economy minister.
“Depending on oil prices, the UAE will see up to 2.5 per cent GDP growth this year,” Sultan al-Mansouri, told reporters on the sidelines of a conference on 26 April, without explaining why the forecast had been revised from the 3.2 per cent figure given earlier this year.
“I’m very positive oil prices will give the UAE a push to inject these revenues into infrastructure and revitalise the economy,” Al-Mansouri said when asked about oil prices, which have averaged above $80 a barrel since March.
Al-Mansouri estimates inflation will stand at 2 per cent in 2010, before adding that the UAE’s economy is shifting its focus from real estate to other sectors such as trade, logistics and tourism.
On 21 April, the Washington-based International Monetary Fund (IMF) more than doubled its 2010 economic growth forecast for the UAE to 1.25 per cent from the 0.6 per cent it had predicted in February this year. (MEED 22:04:10)
In its World Economic Outlook report, the IMF said that fiscal policy has played a critical role in cushioning the impact of the global crisis on the region and in supporting the recovery, before cautioning that the UAE would be held back by “a vulnerable financial sector and weak property market”.
The UAE’s economy is reported to have contracted in 2009.
According to preliminary government estimates obtained by Bloomberg on 20 April, Dubai’s economy shrank 2.5 per cent last year after growing 5.7 per cent in 2008.
The Dubai Statistics Centre has declined to comment on the data as economic growth rates for 2009 have not been made public yet.
Dubai-based investment bank Shuaa Capital estimated that the emirate’s economic growth declined 5 per cent in 2009 in its UAE Vision 2010 report published in January this year. It forecast that Dubai’s economy would contract by 0.4 per cent this year.