IMF Says Impact of Dubai World May Not Be Felt for ‘Some Time’

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The full impact of Dubai’s $24.8 billion debt postponement on the region’s economies may not be felt for “some time,” the International Monetary Fund said.

“In particular, a possible re-pricing of quasi sovereign debt could have a lasting effect on financial systems, corporate sectors, and, more generally, economic activity in the area,” the IMF said today in its World Economic Outlook.

State-owned Dubai World’s announcement in November that it planned to restructure debts, following defaults by two Saudi Arabian groups, has made banks more reluctant to lend and disrupted bond sales across the Middle East. That’s slowing recovery from last year’s recession, caused by slumps in property and oil prices and global trade.