Interesting article here from the The latest 'Middle East Focus' from
Standard Chartered Bank includes a raised UAE forecast for real GDP growth of 10.2 per cent for 2006
Acknowledges that IMF forcast for inflation in 2005 was 8 %
BUT that did not include 30.1 per cent residential rent rises
Given that the UAE's interest rates are pegged to the US dollar, this implies a negative real interest rate. The IMF forecast for inflation in 2005 was eight per cent, but that did not include 30.1 per cent residential rent rises comparing the first quarter of 2006 with the same three months in 2005.
The article ends by acknowledging that a correction in the Real estate sector is possable
This is why Standard Chartered Bank's respected economic team does not think a real property crash is likely, although a soggy patch for sales is possible at some stage.