UAE ‘faces slower real estate growth’

Fujairah: The UAE faces a slowdown in loan growth and real estate activity as it grapples with the fallout of the global financial crisis, policymakers said. States in the world’s biggest oil-exporting region are expecting the global problems to put the brakes on a regional econ-omic boom supported by six years of high oil prices. But Gulf economies sitting on surplus oil revenues would continue to post growth as they push ahead with a monetary union plan that has gained momentum during the financial turmoil, UAE Central Bank Governor Sultan Nasser Al Suwaidi said. « The slowdown will be imposed on us… in everything we will see contractions, » he told reporters on the sidelines of a meeting in Fujairah, one of seven emirates in the UAE federation. « But I think we will still be growing in all directions in a very comfortable way. » His comments echoed those of Mohammad Al Abbar, chairman of Dubai-based Emaar Properties, who said growth in the emirate’s real estate sector could slow to 9 per cent from 13 per cent due to the global downturn. The global crisis could bring Gulf Cooperation Council (GCC) members closer together as five of them, including Saudi Arabia, strive to launch a single currency by a 2010 deadline that had been derailed for years, Al Suwaidi said. The UAE, which pegs its currency to the dollar, opted not to track the latest US interest rate cut, he said. The UAE’s benchmark overnight repurchase rate was left at 1.5 per cent after the 50-basis-point US cut on October 29. By contrast, the Kuwaiti benchmark is 4.5 per cent and Saudi Arabia’s is 4 per cent. « Coordination and cooperation with GCC countries is very important and [their rates] are way above us. We didn’t want to create a bigger gap, » he said. Speaking of the effect of the financial crisis on monetary union, he said: « I would say it gives us more enthusiasm and more energy to push forward to achieve monetary union. » Prior to releasing Gulf notes and coins, Gulf states could set the terms of a numerical currency « at any time », he said. Reuters