The successful restructuring of troubled UAE companies will help to determine the IMF's outlook for its economy, says a senior official at the fund.
"The issue of dealing with that will be important, as will other issues like the outlook for energy prices [and] global growth," said John Lipsky, the first deputy managing director of the IMF.
Mr Lipsky was speaking on the sidelines of the World Economic Forum Summit on the Global Agenda in Dubai yesterday.
Several companies, including government-related entities, are pressing ahead with refinancing debts or restructuring portfolios to put their businesses on a sustainable footing after the global financial crisis.
Dubai Holding is the latest company to seek a restructuring after Dubai International Capital, its private equity arm, was hit by a decline in the value of its global portfolio of assets.
It comes after Dubai World, another state-controlled company, agreed to a restructuring of US$24.9 billion (Dh91.45bn) of debts with creditors.
Nakheel, the conglomerate's property subsidiary, and the utilities company Tabreed, are also progressing with efforts to refinance debt.
The IMF has highlighted a positive outcome as a necessary step to restore confidence in local markets and ease the flow of liquidity in the financial sector.
Last month it upgraded its forecast for UAE growth to 2.4 per cent, rising to 3.2 per cent next year.
The recent surge in oil prices, reaching more than $84 a barrel, is another reason for the IMF raising its outlook.
But sovereign debt problems in the euro zone remain a concern. On Sunday EU ministers hammered out an €85bn (Dh411.07bn) bailout for Ireland and now Portugal is in the spotlight amid fears the crisis could escalate.
Mr Lipsky said the IMF had not lowered its forecast for oil prices because of the problems.
"In broad terms, global energy prices reflect the strength of global economic growth," he said. "For now, despite these risks created by these specific problems, we've continued to maintain our outlook for global growth in the coming year of a moderate economy with some downside risks.
"That's so far been associated with relatively strong and relatively stable energy prices."
There have also been misgivings at the summit over local currency valuations. The US has accused China of undercutting the yuan to bolster exports and ensure a healthy trade surplus, leaving the UAE and other GCC states pegging their currencies to the US dollar caught in the crossfire.
"China economically and in trade is emerging very fast but its currency is slower to change as it is still managing a decision about how to make its currency fully convertible," said Zhang Yunling, the director of international studies at the Chinese Academy of Social Sciences.
tarnold@thenational.ae
The Bloomberg Billionaire Index in full
1 Jeff Bezos $140 billion
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3 Bernard Arnault $83.1 billion
4 Warren Buffett $83 billion
5 Amancio Ortega $67.9 billion
6 Mark Zuckerberg $67.3 billion
7 Larry Page $56.8 billion
8 Larry Ellison $56.1 billion
9 Sergey Brin $55.2 billion
10 Carlos Slim $55.2 billion
UAE currency: the story behind the money in your pockets
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UAE currency: the story behind the money in your pockets
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At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Earth under attack: Cosmic impacts throughout history
- 4.5 billion years ago: Mars-sized object smashes into the newly-formed Earth, creating debris that coalesces to form the Moon
- 66 million years ago: 10km-wide asteroid crashes into the Gulf of Mexico, wiping out over 70 per cent of living species – including the dinosaurs.
- 50,000 years ago: 50m-wide iron meteor crashes in Arizona with the violence of 10 megatonne hydrogen bomb, creating the famous 1.2km-wide Barringer Crater
- 1490: Meteor storm over Shansi Province, north-east China when large stones “fell like rain”, reportedly leading to thousands of deaths.
- 1908: 100-metre meteor from the Taurid Complex explodes near the Tunguska river in Siberia with the force of 1,000 Hiroshima-type bombs, devastating 2,000 square kilometres of forest.
- 1998: Comet Shoemaker-Levy 9 breaks apart and crashes into Jupiter in series of impacts that would have annihilated life on Earth.
-2013: 10,000-tonne meteor burns up over the southern Urals region of Russia, releasing a pressure blast and flash that left over 1600 people injured.
Who has been sanctioned?
Daniella Weiss and Nachala
Described as 'the grandmother of the settler movement', she has encouraged the expansion of settlements for decades. The 79 year old leads radical settler movement Nachala, whose aim is for Israel to annex Gaza and the occupied West Bank, where it helps settlers built outposts.
Harel Libi & Libi Construction and Infrastructure
Libi has been involved in threatening and perpetuating acts of aggression and violence against Palestinians. His firm has provided logistical and financial support for the establishment of illegal outposts.
Zohar Sabah
Runs a settler outpost named Zohar’s Farm and has previously faced charges of violence against Palestinians. He was indicted by Israel’s State Attorney’s Office in September for allegedly participating in a violent attack against Palestinians and activists in the West Bank village of Muarrajat.
Coco’s Farm and Neria’s Farm
These are illegal outposts in the West Bank, which are at the vanguard of the settler movement. According to the UK, they are associated with people who have been involved in enabling, inciting, promoting or providing support for activities that amount to “serious abuse”.
