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Dubai's real GDP is forecast to slow to 4.1 per cent in Q1, due to the impact of lower economic activity in China, India and the EU, according to a report from the Dubai Economic Council.
The slow down in economic growth compares to a 5 per cent growth in the previous quarter and a 10.5 per cent growth in the same quarter of 2011, the Dubai Economic Outlook 2011 report stated.
According to the report, it is estimated that the fiscal deficit in Dubai will continue to decline in 2012. The budget deficit declined from 4.3 per cent of Dubai’s GDP in 2009 to less than 2 per cent in 2010 as a result of the rationalisation of expenditures.
The report estimated a deflation of -0.5 per cent in the fourth quarter of 2011 and forecast an inflation of 1.5 per cent in the first quarter of this year. This is compared to 0.3 per cent in the third quarter.