Economic growth is predicted to slow in the Gulf this year, although the UAE is expected to be a haven for investors. The National's business reporters look ahead.
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Economy
Unless the euro-zone debt crisis suddenly subsides, risks to the global economy will remain this year. Europe faces an increasing risk of sliding into a recession, with growth in the US likely to remain subdued. Regionally, the performance of economies that have experienced unrest is likely to depend heavily on how transitions progress. In the Gulf, growth is expected to slow in several states as oil output declines with the resumption of production in Libya. In the UAE, growth is forecast to accelerate to 3.8 per cent, according to the IMF. - Tom Arnold
Energy
While the economic woes of Europe and the US will continue to be a dominant theme in the oil markets, Gulf producers will also have to contend with slowing growth in Asian markets. We may well see a rerun of last June's explosive Opec meeting, as its members struggle to calibrate the oil price without choking the global economy. Iraq will continue to re-emerge as a major producer. GCC countries, led by Saudi Arabia, will increasingly try to harness the downstream industry to create employment, with the solar industry also being shoehorned into this role. - Florian Neuhof
Aviation
An escalation of the euro-zone debt crisis is would pose increasing challenges for the region's airlines. Middle East carriers could be hit by losses as great as US$400 million (Dh1.4 billion) this year if the European turmoil spreads to a full-blown banking crisis and a recession, the International Air Transport Association (Iata) has warned. As long as the crisis is contained, however, Middle East airlines are forecast to post a combined profit of $300m this year, under Iata's central forecast. Etihad Airways has already said it expects to make a profit for the first time in its history this year. - Tom Arnold
Media
Two new Arabic-language news stations are set to launch this year: Sky News Arabia will be broadcast from Abu Dhabi from the spring, while Prince Alwaleed bin Talal's Alarab channel, to be located in Bahrain, is set to go live at the end of the year. Zubair Siddiqui, managing director of the media agency UM Dubai, said digital media, including so-called search advertising such as that provided by Google, will also be key to growth this year. "Money has not yet moved out of print, but new money is being found for digital," he said. "Search, mobile apps and social will be the three most important areas in terms of growth." According to Informa Telecoms & Media, the region's pay-TV market will also see small gains this year. - Ben Flanagan
Technology
Competition in the technology sector is expected to be fierce this year, particularly as more manufacturers roll out new versions of their tablet computers and an even wider array of smartphones. But as the use of mobile devices becomes wider, and following major cyber attacks on tech companies such as Sony last year, online security will be a renewed area of focus. Google's Android software, which appears on many tablets and mobiles, has become a favourite among consumers, but is expected to be a popular attack target this year. - Neil Parmar
Tourism
The main question hoteliers in Abu Dhabi will be concerned about this year is how new supply that has come into the market will affect business. Towards the end of last year, several new hotels opened including the Park Hyatt on Saadiyat Island, a Rocco Forte hotel, and the Jumeirah at Etihad Towers. Abu Dhabi is hoping to attract 2.3 million hotel guests this year, up from about 2 million last year. Hotels in Dubai are expecting to continue to benefit from its appeal to a more diverse range of markets across the world and as many other destinations such as Syria are likely to continue to be avoided by tourists for some time because of unrest. - Rebecca Bundhun
Telecoms
Single-country telecommunications operators are set to perform best in 2012, according to Shuaa Capital. The investment bank forecasts growth for Saudi Arabia's Mobily, and another year of double-digit growth for the UAE's du - it's two top performers in its forecast for the year. The race to provide next-generation services is expected to intensify in the Middle East and North Africa this year. Late last year, five regional telecoms companies all claimed to be first in the region to launch "4G" mobile networks. This year those claims will be put to the test, as operators start selling USB-based mobile data plans and more 4G mobile phones launch in the local market. - Ben Flanagan
SMEs
The challenge this year will be how to sustain the growth of the small and medium-sized enterprise (SME) sector. Experts suggest SMEs may have a harder time securing credit as banks look to clear bad loans, which will be a blow to many entrepreneurs looking to start-up and other businesses hoping to expand. The general business environment will also continue to be competitive. "I think you will need to work harder, be smarter and be very responsive. But I think we are heading in the right direction, particularly as there is a little turmoil outside," said Rachael Wunsch, the chief executive of Al Tamimi Investments. - Gillian Duncan
Sovereign Wealth Funds
Sovereign funds and other government-linked investors are planning to take advantage of lower asset prices in the developed world. China, which has numerous sovereign investment vehicles, is expected to become an increasingly active player on the global stage. Rumour has it that the country is planning a fund to invest a small slice of its $3 trillion in foreign currency reserves, a move that could have big repercussions on global asset prices. Gulf funds are also looking more closely at fast-growing China and the rest of Asia as destinations for investment. The Kuwait Investment Authority, the country's main sovereign fund, opened an office last year in Beijing. - Asa Fitch
Banking
Will the UAE's banks come out of the woods in 2012? If euro-zone worries prevail, it may be tricky. The euro-zone crisis is rattling companies that have already reached agreement with creditors over debt restructurings. Banks may be forced to shoulder looming debt repayments at companies such as Jebel Ali Free Zone Authority and DIFC Investments if credit markets remain closed. Meanwhile, the Central Bank looks set to shake up the mortgage market with new regulations. More banks may withdraw from the Gulf this year, following Swiss lender EFG International, and job cuts at international banking giants have left many trading floors looking empty. - Gregor Stuart Hunter
Property
Thousands of new homes will continue to put pressure on prices in Abu Dhabi and Dubai. In Dubai, 27,000 new homes are scheduled for completion, with 24,000 slotted for Abu Dhabi. Analysts predict a "flight to quality" as buyers seek out the best projects and lower quality developments scramble. A similar scenario will drive the office market, where the supply of space will far outpace demand. New office towers in Abu Dhabi will put pressure on landlords of older buildings. At current rates there is enough office space coming online in Abu Dhabi to handle demand until the end of the year, Asteco said. - Kevin Brass
Retail
The challenge of 2012 will be how to implement - and police - the corner-shop policy and, separately, sustain the growth of the sector. According to a recent study by the Abu Dhabi Government, there are more than 1,300 independent stores in the city, and many corner shops are also expected to shut due to the high cost of required improvements. Retailers are confident sales will continue to be strong following last year, but the market is also wary of the possible consumer confidence fallout from a recession in Europe. The number of tourists from Europe is likely to fall, but the increase in number of those from the growing middle classes in India and China should continue to lift retail sales this year. - Rory Jones
Markets
Can it get any worse for local markets in 2012? Traders will start the year with a change of scenery, with the opening of the new Abu Dhabi Securities Exchange on Sowwah Island. Another MSCI review on the UAE's status as an "emerging market" is due in June. Meanwhile, traders will eye companies' financial statements carefully for any sign of the resumption of economic growth. But with plenty of debts maturing among Dubai's government-owned companies this year, the embers of the Arab Spring flickering back into life and tensions between the West and Iran increasing, investors should be prepared for a wild ride. - Gregor Stuart Hunter
Industry
One major focus for industry in the UAE this year and beyond will be the Khalifa Industrial Zone Abu Dhabi (Kizad). The development, a port surrounded by a huge industrial park, has been under construction for years but only recently began to sign up tenants. An executive recently said Kizad secured commitments for 30 projects worth $5bn from a range of foreign industrial players. With construction on the port almost complete and the first phase of the industrial zone around three-quarters finished, the zone is set to open towards the end of the year. - Asa Fitch
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