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Sun 24 Feb 2008 04:43 PM

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UAE economy in 'good shape', may grow 6.6%

Central bank governor says strong demand for oil and gas will support growth this year.

The economy of the UAE is in "good shape" and may grow 6.6% this year, even if oil falls to $60 per barrel, Central Bank Governor Sultan Nasser Al-Suweidi said on Sunday.

Economists in a poll by newswire Reuters last year forecast the UAE economy - the second-largest in the Arab world - to grow 7.8% in 2008.

"The UAE economy is expected to grow 6.6% in 2008," Al-Suweidi told a conference in Dubai. "As long as there is strong demand for oil and gas and the oil prices average $60 to $80 a barrel the UAE economy will be in good shape."

It was not immediately clear if he was referring to prices of UAE crudes which usually fetch a few dollars less than US benchmark crudes.

The UAE economy grew 16.48% at current prices in 2007, spurred by faster expansion in the oil and gas sector and growth in non-oil sectors, the Ministry of Economy has said.

Non-oil sectors made up 65% of GDP, the ministry said.

The ministry has not released a figure for real GDP growth in 2007. However, economists in the Reuters poll put the UAE's economic growth last year also at 7.8%.

Investment in real estate, finance and infrastructure is spurring growth in the UAE, the world's fifth largest oil exporter.

Oil rose to near $99 a barrel on Friday as an incursion into Iraq by Turkish troops and cold weather in the US northeast outweighed concerns about mounting problems in the US economy. (Reuters)

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