UAE trade upswing to continue

Dubai : The UAE trade sector experienced an upswing this year, which was in line with the improvement in the global economy and economists believe the numbers won't dip again.

The Dubai Chamber of Commerce and Industry (DCCI) released a study citing United Nations (UN) projections that world trade will grow by 7.6 per cent this year after a 13.1 per cent dip last year. It also expects trade volumes to expand by 5.9 per cent next year. The World Trade Organisation (WTO) has forecast 9.5 per cent trade volume growth this year.

According to the DCCI, the UAE, as an open economy, will see its trade sector recover in tandem with the world trade upward trajectory.

"The UAE trade sector has already recovered as it is tied closely to the global trade cycle. We felt the downturn the most in 2009 and then a lift in 2010," Simon Williams, chief economist at HSBC Middle East, told Gulf News.

But he warns of slower expansion in trade growth next year. "I am cautious about the outlook for 2011 given the difficulties the global economies still have to deal with," he said. The DCCI cited the UAE's position in the top 30 of global merchandise traders, ranking 19 on the list of exporters and 24 in the import ranking, maintaining a world export share of 1.4 per cent throughout 2008 and 2009.

Growth rates in global commercial services, including transport, travel and finance were also affected negatively. The UAE ranks 29 on the world import scale in this respect, taking one per cent of the global market share.

Mark MacFarland, emerging markets economist at Emirates NBD, believes the growth in the Asia Pacific region will boost trade growth in the UAE, including in the hydrocarbons, services, tourism, transport and logistics sectors.

"[Asia Pacific] growth accelerating is encouraging Asian companies to look for hubs to access countries in the Middle East and Africa.

The UAE is the ideal base. We know of Japanese and Korean companies who are considering the move and this would further boost trade," MacFarland told Gulf News.