Dubai debt crisis to slow UAE recovery: IMF

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Dubai debt crisis to slow UAE recovery: IMF
Washington, Dec 4: The IMF plans to cut its 2010 growth forecast for the United Arab Emirates as economic activity slows due to the debt woes of state-owned Dubai World, a top IMF official said.

"The IMF was looking at revising down its forecast for the UAE's non-oil gross domestic product to significantly lower than the 3 per cent it had projected in Oct, " Masood Ahmed, director for the IMF's Middle East and Central Asia Department told to reporters.

Ahmed said he did not anticipate the UAE would need any financial support from the IMF and could easily deal with the fallout with its own resources.

He said the crisis at Dubai World, one of the emirates's flagship holding firms, could lead to higher credit borrowing costs and may also impact other countries as the conglomerate postpones projects and disposes of assets.

He further said, "Our anticipation is that there will be a significant reduction in that growth rate, down from 3 per cent, probably somewhere between 1 per cent and 3 per cent."

"We do believe that continuous engagement and communication with creditors and investors will be critical to ensure an orderly and timely solution," he added.

"We don't see that will be an issue," he said, also noting support by the UAE central bank for domestic banks.

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