By ADAM SCHRECK, Associated Press
DUBAI, United Arab Emirates (AP) — The United Arab Emirates' economy is likely to slow to about 3 percent this year amid a drop in oil prices, the Gulf federation's top economic official said Monday.
That would represent a slowdown from 4.2 percent growth in 2011, Minister of Economy Sultan bin Saeed al-Mansouri told reporters in the country's commercial hub Dubai.
The seven-state UAE federation is the largest Arab economy after Saudi Arabia.
Al-Mansouri said he is less optimistic about growth in the Emirates this year because of the oil exporter's close links to the broader world economy, which is showing fresh signs of weakness.
"The world economy, with all respect to many regions of the world, is still not yet moving, and coming out from the economic crisis," he said.
The International Monetary Fund had estimated that the UAE economy grew 4.9 percent in 2011. It forecast growth this year of 2.3 percent.
The UAE is OPEC's third biggest oil producer, and it relies heavily on oil revenue to balance its budget and fuel its economy. Its coastal cities, particularly Dubai, are also important regional trading hubs.
Al-Mansouri said he believes $100 is the "right price" for a barrel of oil.
"As long as it is hovering $100 we're on the safe side," he said. "I don't think it's going to drop beyond this. ... My expectation is it will hover between $80-100, depending on the world situation."
U.S. benchmark crude prices tumbled to eight-month lows below $82 a barrel Monday following the release of a disappointing U.S. jobs report last week. Prices for Brent crude oil have also dropped sharply to near $97 a barrel.
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