Abu Dhabi: The International Monetary Fund (IMF) on Tuesday reiterated the importance of operational restructuring of Dubai's government-related entities, conceding the process will take "some time".
"Until now, lots of these organisations have been able to attract funding based on implicit guarantees," Masoud Ahmad, IMF Middle East and Central Asia director, said in a conference call last night. "It is now clear these organisations will need to attract funding based on their own financial strength."
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The IMF's comments came as a part of a "public information notice", a report aimed at clarifying its conclusions in its recent forecast revision for the UAE's economic growth. In late January, the fund revised the country's 2010 projection from 2.4 per cent to 0.6 per cent.
The IMF said continued uncertainty regarding Dubai's economy including the real estate sector and debt restructuring for its government-related entities forced the revision. The fund raised its average growth forecast for the Middle East from 4.2 per cent to 4.5 per cent as recovery continues to gain momentum in North Africa, Levant and some Gulf economies.
Ahmad said 2010 projections could be altered by faster-than-expected restructuring of Dubai World debt, the recovery of the emirate's real estate and construction sectors, or an increase in Abu Dhabi government expenditures.
Last week, UAE Central Bank Governor Sultan Bin Nasser Al Suwaidi said he does not "contradict the IMF's forecast", conceding the UAE's expected growth rate will remain "low" this year, but better than in 2009.
