The Dubai economy is expected to grow by about 0.5 per cent this year after contracting by 1.3 percent in 2009, as trade and tourism take the lead in recovery, the report added.

"We have seen a recovery in activity related to trade, related to logistics" in Dubai, Ahmed said. "Tourism is holding up well." Real estate prices in Dubai suffered during the global financial crisis as falling demand led to half of all planned projects being canceled. A housing glut also forced prices lower"said  Masood Ahmed  IMF director for the Middle East and Central Asia.

The Gross domestic product in the Middle Eastern and North African countries will expand 5 percent in 2011 after growing 3.8 percent this year and 1.1 percent in 2009, the report added.

The economies of the Gulf Cooperation Council, which include Saudi Arabia, will be helped as crude oil production climbs to 26 million barrels per day in 2011 from 25 million barrels per day in 2010, the IMF said.

The combined current account surplus of the oil exporters in the region will rise by about $80 billion on current oil price expectations, the IMF said. Of this, close to $50 billion is accounted for by GCC members.

Non-oil growth among crude exporters is likely to be "less robust," according to the report, picking up only by an estimated 1 percentage point between 2009 and 2011.
 
The report also said that eighteen million jobs will need to be created in the region's resource-poor countries to stave off a 'lost generation'. Unemployment figures in Egypt, Lebanon, Syria, Morocco, Jordan and Tunisia show an average of about 12 percent over the last 20 years.

"If you look at unemployment in the region, it's been high for a long time," added Masood Ahmed.

— With input from agencies