Government hopes UAE's economy to grow 1.3 percent in the ongoing financial year despite impact of Dubai World's crisis on the economic recovery of the city-state. The economy minister of the country also forecasted a growth rate of 3.2 per cent during the financial year 2010 owing to strong economic fundamentals.

The official WAM news agency, citing Sultan bin Saeed al- Mansouri reported that inflation would ease to 2 per cent by the end of 2009. Inflation surged to 12.3 percent last year and remained a major challenge for the region.

Mansouri further said, "The national economy has proved its strength by overcoming the different economic challenges that have stormed global countries due to the global economic crisis."

The top Gulf Arab economies -- Saudi Arabia and the UAE has been adversely impacted by global financial crisis that derailed their growth due to decline in demand and financial uncertainties.

But the government took so many measures to mitigate the impact of global slowdown. Increased public spending and a turnaround in oil prices helped the region to come out of the worst ever financial trouble.