Summer's round the corner

Conrad Egbert, editor

It’s been pretty stormy in the region over the past few months. But the sand storms have been the least of my worries.

But, with every dusty day we come closer to the promise of a clear and sunny one. And judging by what transpired at last week’s Abu Dhabi Economic Forum, that day doesn’t seem too far off.

The undersecretary of the Abu Dhabi Department of Planning and Economy Mohammed Abdullah said that the local economy would see itself through the next year with the UAE Government spending on local infrastructure projects, along with its recent move to inject more funds into the emirates’ banks.

Story continues below

Advertisement

FEATURED COMMENT Please click here to comment on this article

A display of such confidence can only be shown if a larger safety net already spans the economy.  In any case this brings relief to the region’s construction industry, which has seen many building projects put on hold or cancelled.

Sultan Al Mansouri, the UAE minister of economy, went a step further and was reported as saying that he didn’t think the UAE would fall into recession at all.

He predicted a stable economy for at least “nine months” from now, but did say that there would be a slowdown as the UAE was not immune to global forces.

Last month the Dubai Government pumped US $20 billion into the economy and the Real Estate Regulatory Agency said developers in the emirate have access to up to $2.2 billion from escrow accounts to cover construction commitments.

In addition to this encouraging news, neighbouring Saudi Arabia should be happy with a report released last week from Bank of America Securities-Merrill Lynch claiming that the Kingdom’s economy will be “minimally” affected by the global turmoil this year and will be back on track in 2010.

The report went on to say that the kingdom’s GDP will shrink by 0.2% in 2009, but will be relatively unaffected due to its savings, lack of reliance on foreign trade and diversified economy with construction leading the way. Saudi Arabia’s GDP is expected to bounce back by 2.8% in 2010.

The report said it has saved 76% of the oil revenues between 2002 and 2008, with its public debt falling from over 100% of GDP in the 1990s to a mere 13.5% in 2008.

Saudi Arabia is the largest construction market in the Gulf, with US $400 billion worth of projects planned or under way.

Summer could be here quicker than we think.