IMF warns Dubai of risk of real estate bubble if megaprojects not implemented 'prudently'

DUBAI, United Arab Emirates – The International Monetary Fund is warning that Dubai's megaprojects could increase the risk of a real estate bubble.

The city, part of the oil-rich United Arab Emirates, has long had a penchant for monumental buildings and development projects, notably a large area around a new airport with hotels, housing and a new conference center to host the world Expo 2020.

But the IMF cautioned that if these projects are not "implemented prudently" they could exacerbate the danger of a bubble and create additional risks for government-owned companies and the banking system, still recovering from a 2009 financial crisis.

The Thursday statement released after an IMF team visit said that economic growth in the UAE is expected to remain strong at 4.5 percent this year.