The International Monetary Fund expects to cut its 2010 growth forecast for the United Arab Emirates as economic activity slows due to the debt woes of state-owned Dubai World, a top 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 forecast for the UAE's non-oil gross domestic product to significantly lower than the 3 percent it had projected in October. That would still be higher than the close to zero forecast the IMF has forecast for the UAE in 2009.

Despite the turmoil surrounding the Dubai crisis, Ahmed said he did not anticipate the UAE would need any financial support from the IMF and could easily deal with the fallout with its own resources.

He said the crisis at Dubai World, one of the emirates's flagship holding firms, could lead to higher credit borrowing costs and may also impact other countries as the conglomerate postpones projects and disposes of assets.

Households could also be hit by lower remittances as workers, many of them from neighboring countries, are put out of jobs or unable to find work.

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 Dubai situation.

A Reuters poll on Monday showed that Gulf Arab states will enjoy solid growth rates next year, with UAE GDP growth up 2.9 percent in 2010.

Dubai, one of the seven emirates that make up the UAE, has been rocked by the crisis at Dubai World , which announced late on Monday it will meet with creditors to delay payment on $26 billion in debt.

Ahmed said the announcement of the amount of debt it is seeking to restructure 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 they should go further to ensure a smooth transition.

We do believe that continuous engagement and communication with creditors and investors will be critical to ensure an orderly and timely solution, he added.

Ahmed said direct financial impact on international banks that lent money to Dubai World is expected to be contained and manageable.

We don't see that will be an issue, he said, also noting support by the UAE central bank for domestic banks.

He said the Dubai crisis could lead to financiers and investors paying closer attention to guarantees of commercial corporations owned by governments, and may also trigger a broader reassessment of commercial risk and property.

(Reporting by Lesley Wroughton; Editing by Diane Craft)

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