Business | Economy
Mohammad says economy stable
The UAE economy has been and is still sound as the government and competent authorities are dealing with the repercussions of the global fin-ancial crisis with patience and wisdom, His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, said on Monday.
- By Himendra Mohan Kumar, Staff Reporter
- Published: 23:33 December 15, 2008
Abu Dhabi: The UAE economy has been and is still sound as the government and competent authorities are dealing with the repercussions of the global fin-ancial crisis with patience and wisdom, His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, said on Monday.
Shaikh Mohammad made the statement as he received Senator Max Baucus, chairman of the US Senate Finance Committee, on Monday.
He called for greater cooperation and coordination among financial and banking institutions around the world to limit the negative consequences of the financial crisis and its impact on the development plans in countries of the world.
Shaikh Mohammad and the US Senator exchanged views on a wide range of economic, political and financial issues of mutual concern and ways to activate mechanisms of cooperation between financial and economic institutions in the UAE and the US.
Senator Baucus lauded the financial policy adopted by the UAE in view of the current turmoil in the world financial markets and its potential impacts on the world financial system.
Meanwhile, the UAE Central Bank Governor Sultan Bin Nasser Al Suwaidi forecast yesterday that the growth of the country's gross domestic product (GDP) would fall to the low-single-digit level in 2009 due to the global financial crisis.
"The year 2008 was almost over when the global financial crisis hit us. We might not see too much reflection of it in 2008, but reflection will be seen in 2009," Al Suwaidi told a press conference. "The slowdown will impact all countries of the world."
However, Al Suwaidi declined to give a specific GDP growth projection for the UAE for next year.
He said although the national economy is poised to slow down in 2009 and 2010, the country has ample resources to sustain a reasonable economic growth rate and it will grow relatively well within the region.
He said the UAE's credit growth would also slow down next year. "I think, we will see 5 per cent to 10 per cent credit growth in 2009... We will have maturing corporate debts in 2009, 2010 and 2011. I think, we will find a solution to the maturities coming in these years," Al Suwaidi added.
He said the UAE will spend on infrastructure to maintain economic growth, but admitted the real estate sector will get adversely affected by the economic slowdown. However, Al Suwaidi said the construction sector won't slow.
"The government doesn't have intentions to stop infrastructure and government projects," said Al Suwaidi. "The government departments will find prices attractive enough to undertake major public infrastructure projects."
Trade is expected to do well despite the economic slowdown, said Al Suwaidi, but he that cautioned tourism, a major revenue earner for the UAE, would slow down.
He said the UAE's banking sector is well placed to weather the economic crisis. "Banking supervision is on sound ground in the UAE," said Al Suwaidi.
Separately, the UAE Central Bank governor said the apex bank had decided to grant corporate banking licenses to three international banks.
- With additional inputs from WAM
Property: Real estate by crisis
The UAE Central Bank Governor Sultan Bin Nasser Al Suwaidi said yesterday the country's real estate sector faces pressures from slowing demand amid the global economic downturn.
"Real estate prices went down slightly...But we must understand that this sector is very rigid and behaves somewhat differently from stock markets due to the fact that a large part of the sector is owned by single and wealthy individual landlords who can weather very high vacancy rates," Al Suwaidi said.
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