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UAE Economic Revival in 2010 will be Stimulated by Oil Sector

UAE : 18 February 2010

The International Monetary Fund (IMF) expressed optimism that the UAE’s economy would grow 0.6 per cent in 2010 following a 0.7 reduction in 2009.

Washington-based fund said that the oil sector is poised to lead the recovery in gross domestic product (GDP) with a 2.7 per cent growth in 2010. It said that as a consequence of lower prices and Opec-mandated production cuts, hydrocarbon export incomes decreased by approximately 45 per cent in 2009, whereas imports reduced by 22 per cent due to an abrupt contraction in consumer goods imports. The reopening of capital markets as well as external borrowing mainly by Abu Dhabi individuals helped improve the international reserves situation by the end of 2009.

The IMF said its board of directors appreciated the measures taken by the UAE authorities to reinforce trust in the banking system, but observed that the Dubai World incident had emphasized the requirement for further unforeseen event planning steps.

The fund admired the UAE authorities for their “decisive response to shocks” from the international monetary disaster, reduced oil prices, and the rupture of the Dubai bubble. These shocks, with the proclamation that Dubai World would request a six-month debt moratorium, have increased significant questions for the UAE economy. Given its fundamental strengths, the outlook for the UAE economy continues to be favorable.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News

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