Plunging oil prices will not have an effect on this year’s federal budget, according to the Minister of Economy. Oil and gas accounts for 40 per cent of the country’s GDP, and the economy is expected to grow at between 4 and 4.5 per cent this year. “We have diversified the economy in the last 42 years, and while it will not have any immediate impact on the federal budget, it will eventually in the next two to three years,” Sultan Al Mansouri, the Minister of Economy, said on the sidelines of a new factory opening in Dubai. “However, my expectations are that the prices will stabilise in the next six months to a year.” He expects cheaper oil to enhance sluggish economic growth, especially in China and other emerging countries. Prices of Brent crude have been falling since last June as rising supplies outstripped demand growth and Opec continued to maintain its production level. Brent yesterday was trading at $49.81 a barrel at 4:18pm UAE time. The UAE produced an average of 2.9 million barrels per day last month, up by 153,000 bpd from November, it reported to Opec last week.