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Abu Dhabi may Face Minor Impact of US Meltdown

“Each and every country in the world is being impacted by the US’s financial crisis some way or the other, a minor impact could be felt here, also”, said Mohammed Omar Abdullah undersecretary of Abu Dhabi Economic Department, while speaking to reporters in the capital.

He said that it is bit early to quantify the impact, as things have started unfolding now.

He did not elaborate, what sectors of economy would be affected the most. But, he said that as a direct consequence of this situation, the Central Bank of the UAE has come to the rescue of the financial industry by opening a window to seek funds to maintain firm liquidity positions.

Abu Dhabi’s highly diversified economy has its underlying strengths, which he said has its own advantages to face up these turbulent times.

Per capita income of Abu Dhabi is $76000, second highest in the world. With the current oil price boom, its GDP grew 18.7 per cent in 2007 to Dh487 billion while projection for current fiscal is Dh502.2 billion, growing at 14.8 per cent.

Asked what affective measures government has taken to contain soaring inflation, he said that there are internal as well as external factors to inflation. On external factors, like imported inflation, which has its creeping impact due to exchange rates fluctuation and currency parity, government cannot do much.

As far as internal factors are concerned, the undersecretary said affective measures have already been taken, including capping rents, whose impact will be felt in coming months.

Abu Dhabi’s official inflation rate is estimated at 11.5 per cent, though economists put it in the range of 12 -13 per cent. He said that in association with MEED magazine, a three- day Abu Dhabi Conference will take place next month, to discuss macro as well as micro economic issues.

Top government officials will review the economic achievements of the current year and shed light on the outlook for 2009.

The conference will cover sectors of real estate, petrochemicals and heavy industries, oil and gas, water and power, tourism, banking and finance, education and health, transport, urban planning.

haseebhaider@khaleejtimes.com