United Arab Emirates growth seen at 1.3% in 2009: Economic minister

The United Arab Emirates (UAE) economy is expected to grow 1.3 percent in 2009 and 3.2 percent in 2010, the country's economy minister said, despite fears that Dubai's debt woes have worsened prospects for an economic recovery.                                            

Inflation is expected to fall to 2 percent by the end of 2009 after declining to 2.5 percent in the first eight months of the year, the official WAM news agency said on Saturday, citing Sultan bin Saeed al-Mansouri.                                            

"The national economy has proved its strength by overcoming the different economic challenges that have stormed global countries due to the global economic crisis", Mansouri said, reiterating the figure he gave for 2009 growth in November. 

In November, Mansouri said the UAE's economy would grow by up to 3 percent in 2010. The global economic downturn sent the top Gulf Arab economies -- Saudi Arabia and the UAE -- into a downturn this year but high state spending and a turnaround in oil prices are helping the world's top oil-producing region get back on its feet. 

Inflation, a major headache in the region in the year of an oil and property-fuelled boom, has dropped sharply in the world's third largest oil exporter. Last year, UAE inflation peaked at 12.3 percent.                                           

A shock announcement by Dubai on November 25 that is sought a repayment freeze on $26 billion worth of debt at Dubai World, hammered global investor sentiment in the immediate aftermath of the news.