IMF to produce UAE economic assessment

The IMF says it will produce an assessment of the UAE's economy.

The IMF says it will produce an assessment of the UAE's economy after a delegation from the institution concluded meetings with key government officials about the country's growth prospects. A Central Bank official described the regulator's meetings with IMF representatives as productive, as the two sides discussed significant economic events of the past year and the outlook for this year.

During the visit between January 3 and 11, the delegation also met with officials from Dubai's Government. The trip was triggered in part by the need for the IMF to reassess the health of the economy after the financial problems of Dubai World. "We provided them with information they needed to do their work," said the official from the Central Bank, who asked to remain anonymous. The IMF described its talks in the UAE about the current status of the economy and its medium-term outlook as "fruitful".

The institution will draw up an internal report about the economy to be discussed by an IMF executive board in a few weeks, it said. The IMF is forecasting growth of 2.4 per cent in the UAE this year, according to data on the Washington-based institution's website. It had predicted an expansion of 3 per cent before the announcement on November 25 that Dubai World was seeking to restructure billions of dollars of debt.

GDP growth in the UAE last year is estimated by the IMF to have fallen close to zero as the global financial crisis stunted expansion prospects. The UAE Government has maintained a positive outlook on economic growth, arguing that the Dubai Government-controlled conglomerate Dubai World's plans to restructure US$22 billion (Dh80.8bn) in debt will not hamper the country's performance. The Government had already made concerted efforts to meet the challenges arising from the situation and the financial crisis, Sultan al Mansouri, the Minister of Economy, said last month.

The Abu Dhabi Government last month injected $10bn into Dubai World through the Dubai Financial Support Fund, to help its property subsidiary Nakheel pay off an Islamic bond, as well as for loan payments, working capital and settling contractors' bills. That followed a previous $15bn in financial support last year from the Central Bank and two Abu Dhabi banks.