DUBAI, (Reuters) – The United Arab Emirates economy will see strong economic growth in 2010, recovering from a contraction in 2009, boosted by an expected rally in oil prices, the central bank governor was quoted as saying on Sunday.
The UAE’s economy was solid and “oil prices rising again will support expected economic growth next year”, Sultan Nasser al-Suweidi told Al Ittihad newspaper.
Weaker oil prices will affect growth and lead to a contraction in the UAE economy in 2009, he added, without giving a figure.
The Gulf region has been hard-hit by a drop in oil prices to just above $32 per barrel in December after prices peaked at nearly $150 a barrel in mid-2008.
Suweidi said he expected oil prices to decline 30 percent in 2009 compared to 2008, adding he estimated the average price of a barrel of oil in 2009 to reach between $60 to $63.
The price of crude has averaged at around $54.67 per barrel so far this year, down from an average of $99.75 in 2008.
“It is natural for UAE gross domestic product to decline in view of these factors,” he said.
Suweidi reiterated the dirham would remain pegged to the U.S. dollar despite fluctuations in the currency.
“The UAE has significant foreign investments and the dollar remains an important currency,” he told the paper.