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UAE economic growth to slow

The United Arab Emirates economy will grow at its slowest rate in five years in 2007 as crude oil prices ease, National Bank of Abu Dhabi (NBAD) said in a research note.

Inflation would also fall to its lowest in three years in 2007 as housing supply rises in Dubai and rent caps curb price increases.
The UAE's economy will grow 7% in real terms in 2007, its lowest rate since 2002, when it grew 2.6%, the bank said. It estimated real GDP growth at 8% in 2006. "NBAD's 2007 projection was based on our expectation that average Dubai spot crude oil prices remain around $55 per barrel in 2007, down from an annual average of $60 per barrel range in 2006," said Giyas Gokkent of the bank's research department.

The bank forecast consumer prices would rise 5.5% in 2007 after an 11% surge in 2006. It would be the smallest rise since 2004, when prices increased 5%.

An estimated doubling of residential units in Dubai by 2008 as well as caps of 7% on rent increases in the emirates of Dubai and Abu Dhabi would dampen price pressures, the bank said.

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