Gulf property slump 'will be limited'

original source Reuters

UAE central bank governor Sultan Nasser al-Suweidi said on Thursday a slump in the Gulf's once booming property sector would be limited while the UAE would ringfence its banking system to protect it from future crises.

"The real estate sector is to be affected. But we must understand that this sector is very rigid and behaves somewhat differently from stock markets due to the fact that the large part of the sector is owned by single and wealthy individual landlords who can weather high vacancy rates," al-Suweidi said at a banking conference.

He said the UAE would also ringfence its banking system and restrict some practices to ensure it could not be dragged into future crises.
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He added that the financial crisis and the consequent slowdown in the economy would reduce inflation.

"Inflation now is expected to go down significantly. One strong reason is the ongoing global financial crisis." he said. (Reuters)