Global GDP growth to decline to 2% in 2009

Global GDP growth in purchasing power parity (PPP) terms is expected to slow down to a mere 2% in 2009, according to a research report from the Economist Intelligent Unit (EIU). The report points to a decline in global economic growth from the 4.8% achieved in 2007 and the projected 3.6% in 2008, with only a sluggish recovery expected in 2010.
Prospects for the global economy and how this may impact business in the Middle East region will be discussed at Economist Conferences’ ‘World in 2009’ Executive Forum on January 20, 2009 in Dubai.
The global financial crisis has caused severe damage to the real economy with a vicious circle between deteriorating financial conditions hitting economic activity and a weakening economy leading to higher defaults and thereby undermining financial conditions. Despite initiatives by governments across the globe, analysts at the EIU believe that any new shocks will still lead to temporary flare-ups, but should not lead to a further worsening of financial conditions on a global scale. However, a full normalisation of financial conditions is not expected until 2010 at the earliest.
Amidst the current crisis, growth in the Middle East and North Africa region is expected to slow down to 4.6% from the projected 6.1% rate for 2008.
"Change will be in the air at the start of 2009, with a new American president, shifting expectations for the economy – and a reappraisal of the energy outlook and investment priorities for the Gulf region. This is a timely opportunity for high-level discussion of what to expect for the year ahead, in the Gulf and beyond," said Daniel Franklin, Executive Editor of The Economist.
‘The World in 2009’ Executive Forum will gather prominent business, financial and political figures to identify and explore trends that will affect business strategy in 2009. Nouriel Roubini, Professor of Economics and International Business, Stern School of Business at New York University, will deliver a keynote presentation on predicted global conditions after the term of outgoing US President George W. Bush. In addition, Sheikha Lubna Al Qasimi, UAE Minister of Foreign Trade will give the closing keynote speech.
“Even as the Gulf states deploy their vast sovereign wealth resources to help support financial institutions in Europe and America, concern is mounting about the impact of the global economic crisis on this fast growing region. The falling oil price and a domestic liquidity squeeze have led to questions about the growth prospects for 2009,” pointed out Robin Bew, Editorial Director and Chief Economist at EIU, posing the question: “Can the Gulf rise out of the storm raging in the rest of the world?"