'No need for more Dubai support measures now '

UAE economy minister feels gov't moves will stabilise economy for minimum 9 months.
'No need for more Dubai support measures now '
By Stanley Carvalho
Mon 02 Mar 2009 12:26 PM

Government measures taken so far to support Dubai through a sharp economic downturn should be sufficient to stabilise its economy for at least nine months, the United Arab Emirates' economy minister said on Monday.

Sultan Al Mansouri also said he expected the UAE, world's fifth-largest oil exporter, would escape recession this year even as it faces a real estate downturn and a slump in oil prices.

The Dubai government last week launched a $20 billion dollar bond programme and sold the first $10 billion tranche to the UAE central bank, a move that calmed worries the former Gulf boom town could default on some $15-20 billion in debts due for refinancing this year.

"We are evaluating the situation on a case-by-case basis. At present, we see stability for at least nine months," Mansouri told Reuters when asked what further moves the government would take to stabilise Dubai's economy.

"As we go on, we are not isolated from the world. We will address the situation at the federal and local levels and take appropriate measures," he said.

The UAE is a federation of seven emirates including Dubai.

Since the global financial crisis deepened in September, the UAE central bank and finance ministry have launched 120 billion UAE dirhams ($32.67 billion) of funding facilities for banks in order to unlock credit markets.

Dubai developers, meanwhile, have access to up to $2.2 billion from escrow accounts to cover construction commitments, the emirate's property regulator said last week.

Mansouri said he was "comfortable" about the situation of the UAE economy.

Some economists are expecting the second-largest Arab economy could shrink in size this year as hundreds of billions of dollars of projects get cancelled or are put on hold and employers cut thousands of jobs.

"I don't think there will be recession in the UAE," Mansouri said. "There will be a slowdown because we are part of the world and we will be affected."

The UAE has set up committees at the federal and local levels to examine how to tackle the financial crisis, he said. (Reuters)

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