Secretary General of Union of Arab Banks (UAB), Wessam Fattouh said on Friday that forecasts indicated that Arab region would witness an economic contraction in 2016 due to the decline of governments' investment performance, Al-Bawaba News reported. On the sidelines of UAB forum currently held in Sharm El-Sheikh, Fattouh expected that Arab governments will not use reserves to inject liquidity in markets which would lead to a lack of liquidity and declining performance. "The decline of oil prices, counter-terrorism operations and war expenses in some countries are the actual reasons of such contraction," Fattouh explained, noting that growth rates during 2015 was due to governments pumping of liquidity that reflected positively on the credit and banking sector. "To eliminate such contraction should be through finding small and micro enterprises," he added, pointing out that such procedures would contribute to reduce unemployment rates as well as economy growth. He revealed that challenges facing Arab banks were due to the frequent US financial pressure on Arab Banks in using US dollar in their dealings.