UAE EXPECTS LOW GDP GROWTH

The United Arab Emirates is poised for two years of slow economic growth as the Gulf state’s property sector is hit by the global financial crisis and banks rein in expansion,

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The United Arab Emirates is poised for two years of slow economic growth as the Gulf state’s property sector is hit by the global financial crisis and banks rein in expansion, the Central Bank Governor, Sultan Nasser Al Suwaidi, said. Growth in gross domestic product (GDP) in the world’s fifth-largest oil exporter would fall to low-single-digit levels in 2009 and 2010, the governor said. UAE economic growth will fall by more than half in 2009 to 3.1 per cent from 7.5 per cent this year on lower oil output and slowing consumer spending. A slump in the Gulf state’s booming property sector would be limited as UAE continues to adopt an expansionary fiscal policy. Tourism would also slow and force hotels to cut room rates, he warned. However a ‘significant’ slowdown in inflation would help sustain a construction sector boom, while trade would continue to grow spurred by local and regional demand, Suwaidi said.