UAE to see significant growth next year

Recovery in the UAE is strong and might come as a surprise on the upside in 2010, specialists in financial services industry said.

"We are growing significantly even as the growth rate we are forecasting is half of what we saw in 2008," said Marios Maratheftis, Regional Head of Research, Standard Chartered. "There is a good possibility that growth rate of 2010 might surprise on upside even if it does not reach the heights of 2008."

He said the growth levels recorded during the boom period were unsustainable and the recovery now would be more "productive".

"Credit was growing by 50 per cent year-on-year and we knew such a boom was never sustainable. Now we have had the recession, we have had the correction, we have seen housing market falling by 50 to 60 per cent, we saw global trade falling; oil production falling by 15-18 per cent, that's the 2009 story. We are now in the recovery phase and UAE's recovery would be driven by strong oil prices, no further cuts from the Opec and the dynamic nature of the economy with sectors like finance and tourism."

Ruling out any problems due to heavy inflows, Neven Hendricks, COO, Corporate Finance, Mena, Deloitte Corporate Finance, said: "Dubai has tightened up its regulation significantly, it is in fact the role model of regulation in the Gulf, I do not see the problem with hot money being as great if it was into the future."

He said Dubai is very service oriented economy and more linked to the global economy. "Growth may not be very fast but Dubai will grow in 2010 and that is encouraging."

"Small and medium enterprises will play a crucial role in the growth of the economy. However, they continue to face a problem in with raising capital," said Sultan Soud Al Qassemi, Chairman, Young Arab Leaders, UAE Country Office.

 

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