Abu Dhabi: The UAE economy should grow by more than 3 per cent this year and its banking sector is able to weather difficulties in the foreseeable future, a Central Bank official said on Monday.
The country's economy was hit by some debt woes last year and the Central Bank's growth forecast for this year would be below rates seen before the global financial crisis.
However, the economic outlook has been boosted by rising oil prices and after Dubai World, Dubai's flagship conglomerate, sealed a deal to restructure $25 billion in debt in September.
Future expansion
"Economic growth is expected to be over 3 per cent this year, led by a rebound in tourism and other services that have great potential for more expansion in the future," Saif Al Shamsi, senior executive director of the UAE Central Bank's treasury department, said at an event.
The UAE economy expanded 6.2 per cent in 2007 and 7.4 per cent in 2008, according to the National Bureau of Statistics.
Giyas Gokkent, chief economist at National Bank of Abu Dhabi, forecasts economic growth of around 4 per cent this year.
"The UAE economy might grow faster in 2011, I expect a possible rise in oil output probably in the second half in 2011," he said.
Shamsi also said that UAE's gross domestic product now stood at more than $300 billion (Dh1.1 trillion). The nominal GDP was Dh914.3 billion in 2009, according to government data.
Analysts polled by Reuters in December expected the UAE economy to expand by 3.6 per cent in 2011 after an estimated 2.3 per cent expansion in 2010. The UAE has yet to release 2010 GDP data.
Shamsi said UAE banks now had a strong deposit base, after customer deposits increased by 21 per cent between September 2008 and December 2010, which put them in a good position.
"It is safe to assume that our banking sector is in a position to weather the difficulties it may encounter in the foreseeable future," he said.
