Tim Fox

Europe's debt woes are hindering growth prospects worldwide, but for the Gulf region it is the indirect consequences of the crisis that pose the biggest challenge.

Almost one third of the way into 2012 the score card for the world economy is a mixed one. Overall the global recovery is progressing but this masks significant divergences between regions and even between countries within regions.

As a major oil exporter, the GCC stands to benefit from any price rises even as economies elsewhere feel the pinch. But in the end, these increases tend to balance out, writes Tim Fox

On the surface the country is faring well following the Arab Spring and the revolution there but it faces a tough road ahead to get the shattered economy back on track.

Bringing down the cost of borrowing encourages investment and spreads liquidity. The signs are good that this will continue, giving the UAE economy a welcome boost.

Market reaction to rising food price rises cannot be hasty or ill-considered if inflation is to be kept under control. Now that the US Fed has acted caution is paramount.

The sabre-rattling over foreign exchange policies could result in the nations involved sparking a conflict that ends up damaging the global economic recovery.

The GCC's largest economy shows signs of returning good health as key credit and monetary figures improve. That should provide a stimulus for its neighbours.

Recent events and global economic data are increasing fears that a second global downturn is on the way, but what is more likely is a generally steady return to solidity.