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Tue 12 Aug 2008 01:53 PM

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64% fear global downturn has reached Gulf

Arabian Business poll reveals concern after casualties on local exchanges.

The global economic downturn has arrived in the Gulf and the good times experienced by people for so long could be coming to an end.

That's the view of a majority of people who took part in an Arabian Business online poll on Monday following a disastrous day on local exchanges.

Emaar was a notable casualty as the Dubai property developer's shares fell to its lowest number for almost a year and the Abu Dhabi Securities Exchange plunged to a nine-month low.

In total, 71 billion dirhams have been lost in the UAE in this month alone.

Thirty-three percent of respondents believed the Gulf was facing difficult times ahead and the economic problems experienced recently in the US and the UK could be replicated in the region.

Another 31 percent agreed that the effects of the global downturn was finally having an impact in the Gulf but thought the region was better equipped to ensure the property crash in the US would not be repeated here.

On Monday, only Saudi Arabia's Tadawul advanced while Oman, experienced its worst one-day decline in almost seven months.

The real estate and telecoms sectors were the victims of panic selling as etisalat, the UAE's largest listed company, dropped 4.7 per cent to a nine-month low in a move described by analysts as "completely unjustified".

But not everyone who took part in our poll thought the future would be gloomy.

Twenty-three percent thought the recent downturn in local markets was just a blip and they would quickly recover while another 13 percent were confident that local economies would continue to grow at a healthy rate.

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Niranjan 12 years ago

I do not agree with this. As long as oil prices continue to remain above 70 dollars a barrel, and as long as the oil wealth continues to get poured into building up of infrastructure and service sectors, any correction in this region will only be temporary and short term. A bigger cause of concern for this region would be how to tackle inflation with no clear rules of engagement in place (minor tinkering will not help), and how to manage growth in these inflationary times.