Business | Economy
Middle East 'will remain resilient' to slowdown
Asia, the Middle East and Africa are expected to remain resilient to the global slowdown in sharp contrast to a prolonged economic slowdown in the US and the Western econ-omies, Richard Meddings, group finance director of Standard Chartered Bank, told Gulf News on Tuesday.
- By Babu Das Augustine, Banking Editor
- Published: 00:01 November 12, 2008
- Richard Meddings, Standard Chartered Bank official.
- Image Credit: Supplied Picture
Dubai: Asia, the Middle East and Africa are expected to remain resilient to the global slowdown in sharp contrast to a prolonged economic slowdown in the US and the Western econ-omies, Richard Meddings, group finance director of Standard Chartered Bank, told Gulf News on Tuesday.
"It would be very complacent to expect Asia and the Middle East to remain unaffected by the global slowdown. But so far the impact has not been as severe as in the case of many Western economies.
"Leading economies in Asia such as China and India are projected to slow down but are projected to maintain healthy growth rates of 7.6 per cent and 6 per cent, respectively in 2009," said Meddings.
Accumulated wealth
In the Middle East, Meddings expect Gulf economies to remain fundamentally strong, although they are also likely to face risks in assets values in short-to-medium term.
He said the strong finances of the governments in the region remain a fundamental source of strength for the financial services industry and the economies as a whole.
"In times of crisis of this nature, countries such as the UAE have a clear advantage in terms of accumulated wealth. Although asset prices could face downward pressure, I think this manageable," he said.
Although a number of businesses will be forced to restructure their business models to suit the new economic environment, the Standard Chartered official said that there would be ample growth opportunities for banks and financial institutions.
"We can not expect to maintain the same growth rates we witnessed in the last few quarters. We will have to learn to adjust to lower growth in the coming years," he said.
While he expects the impact of global recession to last longer than such slowdowns in the past, he said the de-leveraging process is expected to last two to three years.
Subprime crisis
"The unwinding of credit losses is going to take a long time. But the government intervention has saved most economies from systemic crises," he said.
Standard Chartered has been relatively unaffected by the US subprime fallout.
While the bank did not have any direct exposure to the US real estate sector, its structured portfolio is less than 1 per cent of its balance sheet.
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