UAE could face negative growth

The UAE Central Bank Governor, Sultan al Suwaidi, says the country could see negative growth this year and there are no immediate plans to raise interest rates.

The UAE could see negative growth this year and there are no immediate plans to raise interest rates, UAE Central Bank Governor Sultan al Suwaidi said today. "We don't give [GDP] figures but if there will be any growth it will be very small," he said on the sidelines of the annual meeting of the Council of Governors of Arab Central Banks and Monetary Agencies in Abu Dhabi. "It could be slightly negative or slightly positive. It's not going to be a big jump." Mr al Suwaidi said the UAE would see low inflation this year. The Central Bank also had no plans to raise interest rates but would closely watch the actions of the US Federal Reserve to see when it raised interest rates, he said. "At this point in time we are looking at the economy, how well it is doing - is it going up, keeping at a plateau, going down," he said. "When we decide the economy is going up, I'm sure there will be thinking about interest rates." He said the UAE had no plans to cut the dirham free from its dollar peg, he said. It was not the "right time" for the UAE to re-enter plans for the GCC monetary union, he said. "We have given our brothers in the other GCC countries the opportunity to go ahead as we have certain concerns, certain issues with the GCC monetary union so therefore we don't want to act as a stumbling block to this," Mr al Suwaidi said. [e-mail]