Text size:

  • Small
  • Normal
  • Large

Bank says UAE will come through regional unrest intact

HSBC believes the UAE will be virtually unaffected by the political turmoil in the region.

The UAE is one of only two states in the Mena region that will be virtually unaffected by the economic fallout from the political turmoil that has hit the area, according to HSBC.

In a report written by the bank's economic analysts in Dubai, HSBC says that, along with Qatar, "confidence in political stability and security remains undimmed" in the UAE.

The country could even benefit from the turmoil. "The problems being experienced elsewhere may offer the economy some support by strengthening its claim to be a safe haven and natural hub in a wealthy but volatile region," said the bank.

The report compares the current situation in the UAE with its prospects 18 months ago, when the "leverage of its state-owned corporates, the collapse of its real estate bubble and its integration into troubled global markets epitomised the vulnerabilities and excesses that the rest of the region was eager to avoid. Prospects have now changed.

"For all its debt woes and recent economic slump, the UAE's combination of vast hydrocarbon wealth and a dynamic export-oriented service sector has created an economy that has delivered growth and relative prosperity to its small local population."

HSBC said the UAE would not be entirely unaffected by difficulties elsewhere in the region. "Regional demand for UAE goods and services is likely to weaken as Mena economies slow. Recovery in foreign capital flows and in domestic bank lending is also likely to be put back by diminished risk appetite."

The bank forecasts economic growth will be 3.4 per cent of GDP this year and 4.1 per cent next year, in line with the IMF and some other economists, but below official UAE estimates.

The report said the greatest economic risk from the political changes was to Egypt and Bahrain, and downgraded growth forecasts to near zero for each in the current year.

HSBC estimated that the recent financial intervention by the government of Saudi Arabia amounted to US$10,000 (Dh36,730) per adult member of the kingdom's population, or some 30 per cent of GDP.

 

fkane@thenational.ae

Back to the top

More articles


Editor's Picks

 Cityscape Abu Dhabi 2014 will run until April 24, 2014. Fatima Al Marzooqi / The National.

In pictures: Cityscape Abu Dhabi 2014 opens
at Adnec

Key developments and master plans are being unveiled at this year’s property exhibition in the capital.

 Marina Square apartments Reem Island: Q1 2% rise. Studio - Dh65-68,000. 1BR - Dh75-95,000. 2BR - Dh110-145,000. 3BR - Dh170-190,000. Q1 2013-Q1 2014 no change. Sammy Dallal / The National

In pictures: Where Abu Dhabi rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Abu Dhabi have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Room with a view from one of the 21 duplex penthouses located in the Gate Towers sky-bridge. The sports courts and swimming pools can be seen below. Courtesy Alda

In pictures: Aldar’s Gate Towers Penthouse Collection on Reem Island

Aldar launched its Gate Towers Penthouse Collection at Cityscape Abu Dhabi. The launch features 21 penthouses spanning the skybridge, with each having a private indoor pool and incredible views.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National