Asia set to be top export market for Mena
Dubai, November 13, 2012
Asia will be the fastest growing export market for the UAE, Saudi Arabia and Egypt until 2030, according to HSBC’s latest country Trade Forecast report.
The coming years will also see a continued shift away from North America and Europe as the traditional suppliers for imports to China, India, Vietnam, Malaysia and Turkey, the report added.
Tim Reid, regional head of Commercial Banking for HSBC Mena said: “Mena may have experienced some mixed economic fortunes in recent years but today’s reports very much support our belief in the long term economic potential of the region. They re-affirm our view that the emerging markets will be key to Mena’s trade growth as it seeks to expand its trading corridors.”
As the region continues to diversify itself, oil will remain a strong component of its long term trade with the world. The 2011 surge in oil and gas prices underpinned solid growth in the oil producing countries and although oil prices are likely to soften in the near term, we expect to see a renewed upward trend, Reid said.
This will help countries like Saudi Arabia and the UAE to post faster export growth, averaging 8 per cent a year from 2016 to 2020.
Egypt will also rebound and experience sustained export growth to the Mena region, averaging around 8 per cent a year to 2030. Its fastest growth in exports will be to Asia (excluding Japan), which is seen at 11 per cent on average during 2021-30.
Saudi Arabia’s trade has been boosted by high world energy prices in the last few years, with exports rising by 45 per cent in 2011 and by an estimated 8 per cent this year. As a result, Saudi Arabia’s largest export markets are the world’s major economic powers, headed by China and the US, followed by India.
Exports to Asia (excluding Japan) will continue to grow more rapidly than those to other regions, growing by almost 9 per cent a year during 2021-30. Imports from India, China, Vietnam and Malaysia and to a lesser extent Turkey, will show the fastest growth in the coming years.
In the UAE, trade performance has been boosted by high world energy prices, which have seen exports growing by over 30 per cent in 2011 and by an estimated 14 per cent in 2012. Japan, India, Korea and China are its main trading partners.
Amongst the 23 economies in the study, India was the main trade partner in 2011 and is expected to retain this top position in 2030. Imports from India, China and over time, Vietnam, will show the fastest growth in the coming years. Turkey and Egypt will also figure more strongly as economic links between these countries build.
According to the Trade Confidence Index published alongside today’s reports, businesses in Saudi Arabia, Egypt and the UAE are upbeat. Saudi Arabia ranks as the second most confident country surveyed with 58 per cent of businesses anticipating their trade volumes to increase in the next six months, and 36 per cent expecting levels to remain consistent.
The UAE is the world’s third most optimistic country with a majority of traders (61 per cent) anticipating growth in their cross-border business over the next six months. 36 per cent expect levels to remain consistent. Optimism among Egyptian traders has jumped dramatically with an incredible 98 per cent expecting trade volumes to grow or at least stay at current levels in the coming months.
In addition to these figures, 54 per cent of UAE importers and exporters believe their need for trade finance will increase in the coming months, and 76 per cent will look to their banks for funding. Similarly, Saudi sellers plan to use export credit insurance and traditional trade finance products such as Letters of Credit to help mitigate their exposure to risk.
The Global Forecast notes that by 2020, HSBC expects that forward-thinking companies worldwide will have exploited multiple trade corridors and partnerships, created effective networked supply chains, and tightened efficiency in their operations as a result.
This trend continues through 2021-30, contributing to a stabilizing of trade growth which also reflects the growing maturity of emerging markets. – TradeArabia News Service