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Thu 26 Feb 2009 07:08 AM

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DIFC chief upbeat over Dubai's debt financing

Chief economist says $20bn bond programme will satisfy emirate's 2009 financing requirements.

The $20 billion bond programme launched by Dubai government this week will enable it to satisfy its financing requirements during 2009, according to Dr Nasser Saidi, chief economist of the Dubai International Financial Centre.

He said that according to banking and financial reports, some $12 billion in debt will come due during the year 2009, and the bond issuance would help mitigate any repercussions for the emirate from the global economic crisis.

Saidi also noted that the increased spending and investment plans of the emirate are expected to lead to a budget deficit equivalent to between 3-3.5 percent of the gross domestic product in a statement to CNBC Arabiya.

The bond issuance will enable Dubai to meet its financial obligations and proceed with its development and investment programmes, he said.

Separately, the chairman of property company Damac Holding, which has been forced to cut at least 250 jobs as a result of the global slowdown, welcomed the bond programmed.

Hussain Sajwani said: "The $20 billion bonds issue can only help to boost investor confidence in the UAE and shows the belief that the government has in the long term future of Dubai.

"This injection of liquidity that will filter into the economy will help to bring stability to the markets and will reassure investors at a time when they need it most. It sends out strong signals complementing the approach by the government."

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