Growth by 3% likely in UAE economy

A financial stimulus package was launched by UAE, in order to revive the economy in the state of global downturn.

There was a surge in the stocks in the UAE, and yesterday the stocks were the highest in the last three months, when the Minister of Economy said that the economic conditions were likely to improve, instead of the earlier prediction of the economy slowing down further.

According to Sheikha Lubna Al Qasimi, the Minister of Foreign Trade, the economy of the country is expected to achieve a 3 per cent growth by the year end, as the recovery has been spearheaded by the private sector.

This forecast has come after it was stated by Sultan al Mansouri, the Minister of Economy, that the economy of the country would once again improve by the fourth quarter this year.

However, the prediction that the economy of the UAE shall come out of the downturn contradicts the predictions of the IMF and a large number of the local economists, who see shrinking of the economy, instead, this year.

IMF, in May, predicted that growth in the Middle East would reduce to half and that of UAE by 0.6 per cent. However, this scenario is better than that of the global economy, which is expected to shrink by 1.3 per cent.

Philippe Dauba-Pantanacce, a senior economist of Standard Chartered, in Dubai, said: "We forecast 0.5 per cent growth this year, more conservative than the government estimate. Government stimulus packages and a boost in government spending have helped boost the economy this year."

While speaking in Dubai, Sheikha Lubna appreciated the local, regional and multinational companies, business councils for making success the trade and economy in the UAE.

Expecting investment income of nearly Dh40.6bn this year, against Dh30.6bn, during the last year, Lubna said: "The country's seventh place in a recent Nielsen survey of global consumer confidence was evidence that confidence was returning."

Meanwhile, Mr. Al Mansouri said: "Key indicators showed that economic growth would be back on track by the last quarter of this year and the start of next year."

Against the absence of any turn round in the economy, Robert McKinnon at Al Mal Capital said, "I think most likely for the year we are looking at just slightly above flat growth on a good note. But there's always the buffer for the UAE economy of oil."