Phase 2 of stimulus measures under way: Al Mansouri

Minister of Economy Sultan bin Saeed Al Mansouri yesterday spoke of a second phase of economic measures that the country would take to negate the effects of the global economic downturn.

"The second phase, in the first quarter of 2009, was to evaluate our performance in terms of banking, trade and the economy as a whole. I would like to emphasise that the committee is very active and meets on a weekly basis. It is monitoring all of the country's economic sectors.

"It is monitoring the liquidity of the banks in terms of their status in general, their capital adequacy and many other things. There is continuous co-ordination and cooperation between the committee and the Central Bank to assess if there are any issues that arise as we go on."

He said the government was taking a series of steps to stabilise the country's financial markets and make more liquidity available. "The first stage was to inject liquidity into the banking system – Dh120 billion was allocated for this by the financial committee.

Economic growth in the UAE and the country's gross domestic product (GDP) will be affected by the low oil price and the global downturn, he added.

"The low oil price will have a negative impact in 2009," he said.

"The oil price and global trade are crucial to the UAE because of their contribution to GDP and growth in all sectors.

"Oil contributed 38 per cent of GDP in 2008. Now the oil price has come down, which will affect our GDP for 2009. But when the price picks up it should reflect in a positive way on our GDP."

He said the volume of world trade had fallen considerably, and added: "We are a major re-exporting country. Our GDP could be affected if world trade continues at the current low levels."