By Ramy Sameeh
Abu Dhabi – Mubasher: The decline in oil prices is 'good' for the UAE as it moves to diversify its economy away from crude, said global economic expert Mohamed El-Erian.
El-Erian, who is former CEO of PIMCO that manages multi-billion-dollar assets across the global, also said during the Global Financial Markets Forum in Abu Dhabi that the UAE like other countries was dragged by oil fall.
However, with diversification in economy, the UAE will be able to fend off the fallout of the oil fall, he noted.
According to El-Erian, the UAE has huge resilience in terms of monetary policy, coupled with high reserves, and strong ability to cushion high debts, which enables it to proceed safely during this critical period.
The experts also forecasts oil markets to continue volatility in the coming six months, then to resume the rise in 12 to 18 months.
In another vein, El-Erian said Egypt’s officials should put less focus on the valuation of the local currency as they try to solve the country’s economic problems.
“Egypt does not produce enough, needs continuous electricity, reform of the tax system and pro-growth measures to reduce the deficit,” El Erian said. The pound’s valuation is neither the main problem nor the main solution, he said.
Egypt has been facing a foreign currency shortage that has weighed on the nascent economic recovery.
Authorities have introduced measures to reduce imports, raised interest rates and put capital controls in place to save hard currency.
Translated by Sayed Abdel Rahman
