Commodity Online
ABU DHABI : Three major economies of the Arab Gulf region, Saudi Arabia, UAE and Kuwait are bound for serious economic problems, the IMF said on Sunday.
In its latest update on the economic outlook for the region, the International Monetary Fund said these three nations will be affected more as a consequence of a sharp drop in oil prices amid deep recession in developed countries.
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Global recession's impact on the region was much more muted than on most parts of the world, said the report.
The IMF expects the UAE's gross domestic product, the total market value of all the goods and services produced in a year, to decline by 0.6 per cent this year, but it predicts that the country's economy will rebound in 2010 with an annual growth rate of 1.5 per cent.
The Fund expects the economy of Saudi Arabia, the world's biggest oil exporter, to contract by 0.9 per cent this year, and that of Kuwait, another major oil exporter, to shrink by 1.1 per cent.
Qatar is the only member of the Gulf Cooperation Council that is expected to continue its double-digit growth rate.
According to the IMF estimates, the continued spending by governments in the region will help cushion the impact of lower oil prices.
There is, however, good news on the inflation front. The IMF forecasts that UAE consumers will be the major beneficiaries of a fall in food and fuel prices.
Inflation in the UAE is expected to fall to 2 per cent this year compared to 11.5 per cent last year.
