The International Monetary Fund (IMF) is not concerned about Dubai’s ability to repay its estimated $48 billion of debt obligations, according to the director of its Middle East and Central Asia department.
Masood Ahmed was speaking to reporters in the emirate on Tuesday as part of the IMF’s regional economic outlook update for the MENAP region.
The update reported a mild economic recovery of three per cent for the region’s oil importers but warned that the rise will not be enough to reduce the region’s large employment deficit.
The report also stressed that countries must not lose sight of the need to diversify their economies and generate growth as well as jobs.
“Resolute policy action, across the region, will be necessary this year, for both oil exporter and oil importer countries,” said Ahmed.
“For MENAP oil exporters, further strengthening of fiscal and external positions will be important to reduce their vulnerability to potential material oil price decline.
“Whereas for oil importers, greater fiscal consolidation will be necessary to preserve macroeconomic stability, instill confidence, improve competitiveness, and mobilize external financing,” he added.
Following last year’s sluggish growth for oil importers, a scaling-back of production from 5.7 per cent in 2012 to 3.2 per cent is expected this year.
Jeff Singer, CEO of Dubai’s DIFC, where the announcement took place, said: “The IMF report indicates the need for job creation in the region and for policymakers to design and implement a bold agenda of structural reforms.
“Private sector growth and increased international trade will be paramount to meet the growing infrastructure and capital investment needs for the region.”
When questioned by reporters, Ahmed said he was not worried about Dubai’s ability to meet its upcoming debt obligations, estimated to be around $48 billion over the next three years.