Some welcomed the fact that Brent Crude, having hit a low of US$ 93 earlier, ended the week hovering around the US$ 100 mark. As the Iranian crisis had pushed up prices earlier in the year, the European economic woes and growth contraction in China have led to the current fall – well down on the US$ 126 mark witnessed in March.

But the news is not so good for Gulf producers as some estimate that for every US$ 1 drop in price costs them an annual US$ 6 billion in lost revenue. Last year the average oil price came in at around US$ 110 and earned the UAE US$ 112 billion and contributed 39% to the country’s economy. A fall to say an average of US$ 95 per barrel will leave the country at least US$ 14 billion short on the year.

But lower oil prices, allied with the global economic malaise, will inevitably result in the country posting a lower growth this year. 3% in 2012 will be highly regarded even though it will be well down on the 4.2% recorded in 2011.

There is good news in certain non-oil sectors. Following unprecedented falls in 2010, there have been significant improvements in retail trade (up 10%), manufacturing (6%) and transport (4%). However construction is still under the cosh but managed to register a 3% expansion in 2011.

One company that will not be participating in any further growth in 2012 will be the Australian builder, Hastie Group. Specialising in mechanical and electrical contracting, the company, which had been involved in several major projects here,  has gone into administration and part of its problems seems to have been the discovery of on-going accounting irregularities of US$ 20 million. As so often is the case, this has been put down to the actions of a “rogue employee”!

One former Australian company, Multiplex, (now Canadian-owned Brookfield Multiplex) is faring better having just built the JW Marriott Marquis Dubai located on SZR. What will be the world’s tallest all hotel building at 355 metres will see the first of its two phases opening later in the year. The hotel will have over 1,600 rooms and is owned by Emirates.

Further good news for Australia came with reports that their economy grew by 1.3% in the last quarter – far better than expected. But this may present a distorted view as the incredible mining boom may be disguising problem areas in other sectors including housing, retail, tourism and exports. The high dollar rate and the fact that the top 200 companies have seen over US$ 100 billion wiped off their value since the beginning of May do little for business confidence and consumer sentiment. Like Dubai, the Aussie economy faces the same pressures that continue to arise from the eurozone crisis and a slowdown in China’s growth.

On the local front, Nakheel have reported a US$ 100 million Q1 profit compared to a US$ 10 million loss in 2011 whilst their revenues have almost tripled to US$ 370 million over the same period. This comes at the same time as an industry report indicates a strengthening of the residential sector in certain areas of Dubai.

The Dubai Financial Market Index continued with its recent lacklustre trend closing the week down 8 points to 1464 and 6% down over the last month. It is difficult to see any dramatic change for the remainder of June.

Facebook shares continue to plummet as they try to achieve a more realistic price level. An almost 30% decrease since its 18 May debut seems to indicate that the stock was well over-valued at a massive 107 times reported earnings.

On-going dismal economic data from the Eurozone continues to dog the markets. The 10 year bond rates indicate the dire mess the eurozone is in with Greece paying 28.6%, Portugal 11.5%, Ireland 8.2% and Spain 6.1% for servicing their long-term debt whilst Germany’s rate is at 1.4%. The fact that Greece is paying 20 times more than Germany says so much for a common currency!

Whilst many consider the inevitability of Greece returning to the drachma, the focus now is to try and protect Spain from the going the same way. But any bail-out attempts are fraught with danger and failure will only hasten the debt crisis further in countries such as Hungary and Italy.

Tomorrow never knows but we are entitled to ask what have the European politicians been doing about their economic crisis and, even more damming, what have the world diplomats been doing about Syria. Precious little!