Restoring confidence in the Gulf region's banking system and ensuring the resumption of lending activity will be a high priority for central bankers when they converge on Kuwait City Wednesday. “Credit growth will normalize by the second half of 2010 for the region, but maybe not for the United Arab Emirates. But going forward, it will be a new normal of about 15 percent growth, not the 30 percent-40 percent credit growth we've seen in previous years,” said Paul Gamble, head of research at Jadwa Investment in Saudi Arabia. Depressed lending levels will likely lead to a more muted level of economic growth this year compared with previous years with expansion in the low-to-mid single digit levels, said economists. The IMF said economic growth in the region during 2008 was 7.1 percent. Jadwa expects the Gulf economies to grow by about 4 percent in 2010 while Samba forecasts a 5 percent expansion. Economists at HSBC Middle East see growth in the Gulf, with the exception of Qatar, lagging the 6 percent expected for global emerging markets.
