(Adds details from conference call)
WASHINGTON Dec 2 (Reuters) - The International Monetary Fund expects to cut its 2010 growth forecast for the United Arab Emirates because of fallout from the Dubai debt crisis, a senior IMF official said on Wednesday.
Masood Ahmed, director for the IMF's Middle East and Central Asia Department, told reporters the IMF was looking at revising down its growth forecast for the UAE's non-oil gross domestic product to "significantly lower" than the 3 percent it had projected in October.
The debt woes of government-owned Dubai World have dented confidence in the Gulf Arab business hub and could lead to higher credit borrowing costs, and may impact neighboring countries as the conglomerate postpones international projects, he said.
"Our anticipation is that there will be a significant reduction in that growth rate, down from 3 percent, probably somewhere between 1 percent and 3 percent," said Ahmed, following a preliminary assessment of the crisis.
Dubai, one of the seven emirates that make up the UAE, has been rocked by the crisis at Dubai World DBWLD.UL, which announced late on Monday it will meet with creditors to delay payment on $26 billion in debt.
Ahmed said Dubai World's announcement of the amount of debt it is seeking to restructure "has helped to put boundaries around the amount and the scope of the debt restructuring."
He said the IMF was also encouraged by Dubai World's announcement it will strive for equitable treatment of creditors in the debt talks, but emphasized more was needed.
"We do believe that continuous engagement and communication with creditors and investors will be critical to ensure an orderly and timely solution," he added.
Direct financial impact on international banks that loaned money to Dubai World is expected to be "contained and manageable," Ahmed said. (Reporting by Lesley Wroughton; Editing by Leslie Adler) ((firstname.lastname@example.org; Tel: 1-202-898-8317; Reuters Messaging: email@example.com))