No Immediate Interest Rates Cut

ABU DHABI - The UAE economy surged ahead last year at an unexpectedly fast clip of 7.4 per cent, thanks largely to soaring oil prices, the Ministry of Economy said on Wednesday.

By Staff Reporter

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Published: Fri 27 Mar 2009, 1:33 AM

Last updated: Mon 6 Apr 2015, 1:45 AM

The price of crude has come down since, and the global financial crisis has intensified. In spite of the slowdown, UAE Central Bank Governor Sultan bin Nasser Al Suwaidi, meeting with counterparts from other Gulf countries in Bahrain, said he was not now considering cutting interest rates to try to stimulate the economy.

“We will take administrative decisions that would help, but would not necessarily cut rates and definitely not … cut rates immediately,” he said on Wednesday in Manama.

The UAE’s Gross Domestic Product, adjusted for inflation, accelerated from the previous year, when GDP increased by 5.2 per cent, according to the ministry’s Central Statistics Department. The data suggested that the global financial crisis had had a “minimal” impact on the UAE, Minister of Economy Engineer Sultan bin Saeed Al Mansouri said in a statement.

Some economists expressed surprise at last year’s growth rate, though the global crisis could slow it in 2009, they said. Inflation could also be a concern. The GDP data contained an imputed inflation rate of 18.6 per cent for 2008 — significantly higher than 11.0 per cent for 2007 and 9.1 per cent for 2006.

With inputs from agencies

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