The UAE economy is set to grow at 1.3 per cent this year, the

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Gulf country’s minister of economy, Sultan Al-Mansouri, has said.

The economy is expected to grow by 3.2 per cent in 2010, Al-Mansouri said while addressing at the opening session of the UAE-Azerbaijan joint committee in the UAE capital yesterday.

The UAE’s progress has created an attractive investment climate for mega developments, Al-Mansouri said adding that the economy will be able to "absorb" Dubai World debt.

He said Dubai World’s debts are small and will not reflect largely on the UAE's overall economy. "The ministry has completed the preparation of the foreign investment law, which will grant more protection, and place regulatory incentives for overseas investors to ensure a favorable environment for investors to conduct business," he added.