A recent report by International Monetary Fund's latest regional economic outlook report for the Middle East and Central Asia says that before the inflation in UAE ease up to 10.8% in 2009, it will be 12.9% in 2008, which is higher than 11.1% in 2007.

The report by IMF was issued on Monday and it informed that presently, inflation is the major issue of concern in the Middle East and Central Asia.

The report says, "UAE's real gross domestic product growth is projected to slow to 7.0 per cent in 2008, compared with an estimated 7.4 per cent in 2007, and to 6.0 per cent in 2009."

"UAE's non-oil GDP growth is projected to be 8.1 per cent in 2008, less than an estimated 8.8 per cent in 2007, and 7.1 per cent in 2009. Whereas, oil GDP growth is likely to remain constant at 3.5 per cent in 2008 and 2009, unchanged from unchanged 2007 estimates," said the report further.

The financial markets have had a mixed impact by the global credit crisis so far.

The report noted that there has been a downfall in most equity markets from highs achieved in 2007 and early 2008. Furthermore, there has been an increase in the sovereign spreads across ME and Central Asia. However, in most countries, the domestic bond markets have stayed "broadly steady."

The report finally concluded, "Continued efforts are needed to boost the resilience and flexibility of the region's financial markets in order to reduce effects of the global credit crisis the report stated."