DUBAI, (Reuters) – The economy of the United Arab Emirates is in “good shape” and may grow 6.6 percent this year, even if oil falls to $60 per barrel, Central Bank Governor Sultan Nasser al-Suweidi said on Sunday.
Economists in a Reuters poll last year forecast the UAE economy — the second-largest in the Arab world — to grow 7.8 percent in 2008.
“The UAE economy is expected to grow 6.6 percent in 2008,” Suweidi told a conference in Dubai. “As long as there is strong demand for oil and gas and the oil prices average $60 to $80 a barrel the UAE economy will be in good shape.”
It was not immediately clear if he was referring to prices of UAE crudes which usually fetch a few dollars less than U.S. benchmark crudes.
The UAE economy grew 16.48 percent at current prices in 2007, spurred by faster expansion in the oil and gas sector and growth in non-oil sectors, the Ministry of Economy has said.
Non-oil sectors made up 65 percent of GDP, the ministry said.
The ministry has not released a figure for real GDP growth in 2007. However, economists in the Reuters poll put the UAE’s economic growth last year also at 7.8 percent.
Investment in real estate, finance and infrastructure is spurring growth in the UAE, the world’s fifth largest oil exporter.
Oil rose to near $99 a barrel on Friday as an incursion into Iraq by Turkish troops and cold weather in the U.S. Northeast outweighed concerns about mounting problems in the U.S. economy.