Tags: United | Arab | Emirates | growth

United Arab Emirates Expects Growth to Slow to 3 Percent This Year

Monday, 04 June 2012 07:40 AM EDT

The United Arab Emirates' economic growth is likely to slow to about 3 percent this year as it feels the effects of a sputtering global recovery, the Gulf federation's top economic official said Monday.

That would represent a slowdown from 4.2 percent growth in 2011, Minister of Economy Sultan bin Saeed al-Mansouri told reporters in the country's commercial hub, Dubai.

The seven-state UAE federation is the second largest Arab economy, after Saudi Arabia.

Al-Mansouri said he is less optimistic about growth in the Emirates this year because of its close links to the broader world economy, which is showing new signs of weakness.

"The world economy, with all respect to many regions of the world, is still not yet moving and coming out from the economic crisis," he said.

The International Monetary Fund forecast growth this year of 2.3 percent. Both the IMF and UAE figures are estimates.

The UAE is OPEC's third biggest oil producer, and it relies heavily on oil revenue to balance its budget and fuel its economy.

Al-Mansouri said he believes $100 is the "right price" for a barrel of oil.

"As long as it is hovering $100, we're on the safe side," he said. "My expectation is it will hover between $80-$100, depending on the world situation."

U.S. benchmark crude prices tumbled to eight-month lows below $82 a barrel Monday following the release of a disappointing U.S. jobs report last week. Prices for Brent crude oil have also dropped sharply to near $97 a barrel.

Besides being a key oil producer, the UAE is a major Middle East trading hub. Dubai is home to the region's busiest airport and sea port, and it has long been a transfer point for goods moving in and out of nearby Iran.

Al-Mansouri said tightening Western-led financial sanctions aimed at convincing Iran to scale back its disputed nuclear program are hurting UAE-based traders doing business with Iran.

The restrictions have made it increasingly difficult for banks to deal with Iran's financial system.

"Definitely the trade has been affected by that. You just go and talk to anyone from the trading community here, and they are complaining about that," he said.

© Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Monday, 04 June 2012 07:40 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
Get Newsmax Text Alerts

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved
© Newsmax Media, Inc.
All Rights Reserved