Dubai’s Economy Will Contract 0.5% in 2010, IMF Says (Update1) - BusinessWeek

Dubai’s economy will shrink about 0.5 percent this year, the International Monetary Fund said, marking the second year of contraction for the debt-laden emirate.

Abu Dhabi, the largest of the United Arab Emirates and owner of more than 90 percent of the country’s oil reserves, will grow 3.7 percent in 2010, Masood Ahmed, the IMF’s director for Middle East and Central Asia, told reporters in Dubai today.

Real-estate prices in Dubai, the second-largest emirate in the U.A.E., have plummeted about 50 percent from their peak in late 2008. The emirate had to seek a $20 billion bailout from Abu Dhabi last year after borrowing $109 billion, according to IMF estimates, to build itself into a tourism and financial center.