By Andy Sambidge
HSBC's Trade Forecast says China, India, Vietnam, Malaysia to be major partners by 2030
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.
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."
Despite the Middle East region continuing to diversify itself, oil will remain a strong component of its long term trade with the world, the report said.
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, HSBC said it expects to see a renewed upward trend.
The report said this trend will help countries like Saudi Arabia and the UAE to post faster export growth, averaging 8 percent a year from 2016 to 2020.
HSBC also said it expects Egypt to also rebound and experience sustained export growth to the MENA region, averaging around 8 percent a year to 2030.
Its fastest growth in exports will be to Asia (excluding Japan), which is seen at 11 percent on average during 2021-30.
The HSBC report said that Saudi Arabia's exports to Asia (excluding Japan) will continue to grow more rapidly than those to other regions, growing by almost 9 percent 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, it said.
For the UAE, India was its 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, the report said. Turkey and Egypt will also figure more strongly as economic links between these countries build, it forecast.
According to the HSBC's Trade Confidence Index, businesses in Saudi Arabia and the UAE are upbeat about the future.
Saudi Arabia ranks as the second most confident country surveyed with 58 percent of businesses anticipating their trade volumes to increase in the next six months, and 36 percent expecting levels to remain consistent.
The UAE was the world's third most optimistic country with a majority of traders (61 percent) anticipating growth in their cross-border business over the next six months.
Another 36 percent expect levels to remain consistent, the index showed.
In addition to these figures, 54 percent of UAE importers and exporters said they believed their need for trade finance will increase in the coming months, and 76 percent will look to their banks for funding.
Similarly, Saudi sellers said they plan to use export credit insurance and traditional trade finance products such as Letters of Credit to help mitigate their exposure to risk.