The United Arab Emirates has topped a trade confidence index as import/export traders see the Middle East as offering the best short-term growth prospects, an HSBC survey said on Sunday.

The poll surveyed 2,100 trade-oriented small and medium businesses in 24 cities across seven countries on their 3-month outlook on trade volume, buyer and supplier risks, trade finance and impact of foreign exchange and government regulation.

The Trade Confidence Index (TCI) for the UAE was the highest among all countries surveyed, including Singapore and the city of Hong Kong, with traders optimistic about the outlook for cross-border trade over the next three months, said the survey.

The UAE scored 115.2 points compared to Singapore's 99.9 and Hong Kong's 93.1, two major global trading centres.

Commenting on the results, Sheikha Lubna Bint Khalid Al Qasimi, UAE minister of Foreign Trade said: “If the HSBC Trade Confidence Index is of any indication, it’s a clear sign that the UAE continues to be a place to do business and capture growth opportunities."

"The UAE has taken several rapid and practical steps to cope with the implications of the global financial crisis; the Government guaranteed bank deposits and offered substantial financial facilities to banks amounting $32 billion in the fourth quarter of last year, boosting confidence in the UAE’s economy and confirming the ability of country to deal rapidly, immediately and positively with the latest economic developments.”

Simon Cooper, deputy chairman and CEO, HSBC Bank Middle East, said: Developing economies such as the UAE are reporting brighter prospects for trade business because in many cases their economies are not as heavily reliant on Western markets as some of the other countries covered in the survey."

"In the UAE, government measures to stimulate the domestic economy are also buoying business confidence. The UAE and the wider Middle East are expected to recover faster from the downturn and continue to grow in 2010," he remarked.

Kersi Patel, HSBC's regional head of trade and supply chain, said "Trade is the lifeblood of the UAE economy and its trade to GDP ratio of over 130, one of the highest in the world, is testimony to this."

"The government here has done a lot to boost trade by investing in trade-related infrastructure and providing various incentives," he said.

Large businesses were excluded in the survey as they had the financial muscle to keep their businesses going unlike the medium and small traders, said Patel.

Around 40 per cent of UAE traders said they will need more finance in the short-term, compared to 30 percent in Hongkong and 20 percent in Singapore.

HSBC has sanctioned trade finance totalling Dh1.3 billion ($354 million) this year alone in the UAE, said Patel.-Reuters