DUBAI (Reuters) – The United Arab Emirates economy is in a good position to weather a global downturn and its real estate sector is not poised for a sudden slowdown in the near term, its economy minister said in remarks published on Tuesday.
The second-largest Arab economy would not enter recession because it has succeeded in diversifying its sources of revenue away from a reliance on oil export income, Sultan bin Saeed al-Mansouri told Emarat al-Youm newspaper.
“It is normal that we be affected by what is happening in global markets but there are elements of confidence and protection that are relevant to the particulars of our economy and its diverse base of income,” Mansouri was quoted as saying.
OPEC member UAE was reviewing its economic policies to devise a three- to five-year plan that takes into consideration a global recession, Mansouri added, without giving details.
Like its neighbors in the world’s biggest oil-exporting region, the UAE economy has been booming on six years of high oil prices.
Oil prices have plunged by almost half since hitting record levels above $147 a barrel in July on expectations of a slump in energy demand during a global downturn.
The drop in energy prices would help bring down inflation in the UAE next year, after it hit a 20-year high of 11.1 percent last year, Mansouri said.
Demand for real estate in the Gulf state was still strong, he added.
The UAE, a federation of seven emirates including Abu Dhabi and Dubai, has witnessed a construction boom since it opened its property sectors to foreign investment in 2002.
Residential property prices in Dubai rose 42 percent in the first quarter alone, according to Colliers International. Soaring rents have been one of the main drivers of inflation in the country.
“There will not be a sudden decline in the real estate market in the short run … it is a matter of supply and demand, which remains high and there is no decline in rents yet,” Mansouri said.