UAE inflation to plummet to 2%: IMF

The International Monetary Fund has forecast an inflation drop for the region in general and the UAE in particular according to a report published in Emirates Business 24|7. The UAE is to record one of the lowest inflation rates in the region at around two per cent from 11.5 per cent. "For the region as a whole, inflation pressures are projected to subside quickly, owing to lower commodity prices, rents, and economic activity," the IMF said in its World Economic Outlook.
Its figures showed the combined inflation rate of the Middle East oil exporters would recede to around 8.8 per cent in 2009 from 10.3 per cent in 2008. Besides slower growth, lower oil prices are to turn current account surplus in the region into a deficit in 2009, it said.
"With dwindling surpluses in oil-producing countries, fiscal balances are to deteriorate substantially, as revenues decline and governments use the buffers accumulated during the recent boom to sustain domestic demand by maintaining ongoing investment projects," it said.
"Downside risks to the outlook are considerable…," the IMF report said.