OECD and reopening of UAE markets
Posted by Ivo Cerckel on December 10th, 2008
There are signs that the nine-day holiday that started on December 2 was a good breather for United Arab Emirates (UAE) investors. The UAE markets are poised to open on a positive note when trading resumes tomorrow, Thursday, helped by several governments around the world announcing stimulus packages, says Gaurav Ghose, Financial Features Editor at Gulf News. (1)
The Organisation for Economic Co-operation and Development (OECD) says that the USA economy is still facing “sharp downside risks” to growth and that another fiscal stimulus could be needed if things get worse. The big rate cuts by the USA central bank, the Fed, “appear to be roughly appropriate in light of the adverse effect on real activity” of the credit squeeze, and “monetary policy should remain highly accommodative for quite some time to support the economy and the financial system”, says the OECD. (2)
Gulf News says that the stimulus packages have helped the mood of investors.
The OECD says that another fiscal stimulus could be needed if things get worse.
But once the USA economy would revive as a result of the stimuli, the Fed will have to raise interest rates in order to curb inflation.
At the same time, the USA government will have to take steps to reduce public debt.
How will that circle be squared?
Ivo Cerckel
NOTES
(1)
Investors ready to trade as nine-day breather ends
By Gaurav Ghose, Financial Features Editor
Published: December 09, 2008, 23:38
http://www.gulfnews.com/business/Markets/10266012.html
(2)
US faces deep problems, OECD says
By Steve Schifferes, Economics reporter, BBC News
Page last updated at 10:53 GMT, Tuesday, 9 December 2008
http://news.bbc.co.uk/2/hi/business/7772794.stm
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