The UAE economy will slow this year, but the country will still remain in the fast lane compared to struggling nations to the west. That’s the verdict of global bank Standard Chartered, which yesterday published its economic forecast for 2012.
It expects the world economy overall will grow at two speeds - with the Middle East, Asia and Latin America to outperform troubled Western nations. The bank forecasts that the UAE economy will grow at 2.4 percent in 2012, compared to 3.8 percent last year. It believes Abu Dhabi will lead the way with growth of three percent, and Dubai will manage growth of 2.4 percent - largely due to the bullish performance of its stalwart retail and tourism sectors. Such figures may underwhelm compared to those enjoyed by the UAE in the recent past - but are far preferable to those predicted by the bank for Europe (-1.5 percent), the UK (-1.3 percent) and the US (+1.7 percent).
The bank said it expected a “significant slowdown” in the global economy in the first half of the year due to “the crisis in the West”. It sees global growth falling from the three percent recorded last year to 2.2 percent in 2012. “This points to the continuation of a two-speed world where a fragile West contrasts with a resilient East… yet no region is fully decoupled from events elsewhere,” noted the bank’s chief economist Gerard Lyons. But after a tough first-half of the year, Lyons says growth in China and other emerging economies will pick up. “It will be a recovery made in the East and felt in the West. If ever one needed to illustrate the shift in the balance of power, this is it.” Standard Chartered expects the economic growth of the Middle East to “decelerate only moderately in 2012”.
Marios Maratheftis, the bank’s head of research for Europe, Middle East, Americas and Africa, says that while the troubles in Europe “bring back memories of 2009” much of the Middle East is “in a significantly stronger position now”.