UAE cbank sees low ‘10 growth

DUBAI: The central bank of the United Arab Emirates forecast the country's growth to be low in 2010 but better than the previous year, its governor told a media briefing on Monday, according to a source at the briefing.
Sultan Nasser al-Suweidi told local media the central bank expected the growth rate in 2009 to be "slim", while the 2010 rate would be "low" but better than in 2009, the source said.
Analysts polled by Reuters in January predicted UAE growth would be 2.5 per cent this year -- the slowest pace in the Gulf. But the world's third largest oil exporter would still improve from an estimated contraction of 1.4 per cent in 2009.
"I expect the UAE to grow in 2010, but I think the rate of expansion will be at least two percentage points below the regional average," said Simon Williams, regional economist at HSBC.
According to the Reuters poll, Qatar will remain the region's leader with a 16.1 per cent jump in gross domestic product this year thanks to massive expansion of its natural gas facilities, while Saudi Arabia, the largest Arab economy, is expected to grow by 3.8 per cent.
Abu Dhabi, the UAE capital with nearly 60 per cent share of the overall nominal GDP in 2009, will continue to drive the country's growth this year while assisting its fellow emirate Dubai repay debts of its top government-linked firms severely-hit by the global financial crisis.
"For the UAE as a whole, low single digit real GDP growth - spearheaded by Abu Dhabi - is probable in 2010," Giyas Gökkent, chief economist at the National Bank of Abu Dhabi said in a research note.
The International Monetary Fund (IMF) forecast last month that the UAE economy would grow zero to 1 percent in 2010 as the impact of Dubai's debt restructuring continues to be a drag on its performance.
"We don't contradict their prediction but the IMF changes their forecast from time to time," Suweidi said. The IMF also said that UAE overall gross domestic product contracted by 0.7 in 2009. The UAE central bank and Abu Dhabi lent an overall $20 billion to Dubai last year to help its neighbour restructure debts. -Reuters