HSBC forecasts huge growth in trade volumes



Trade volumes in the Middle East and North Africa (Mena) will grow by nearly 85 per cent by 2025, as the region outstrips the performance of global markets, according to HSBC.

UAE trade will more than double, rising 126 per cent to US$414 billion (Dh1.52 trillion) during the period, the bank predicts.

The forecast reinforces "our view that the long-term case for superior returns in the Mena region remains," said Tim Reid, HSBC's head of commercial banking for the Mena region.

"East to east trade, intra-Mena trade and foreign direct investment connectivity continue to grow."

Trade activity will expand by $1 trillion every year or an annual average of 2 per cent until 2015, according to the HSBC Trade Connections report.

By 2025, global trade will reach $4.36tn, an expansion of 73 per cent.

The report signals a positive longer-term outlook for trade even as the latest indicators point towards ebbing global demand for goods this year.

The World Trade Organisation last month dropped its annual growth in volume projection for merchandise trade to 5.8 per cent from 6.5 per cent it predicted in April.

Despite gloomier prospects in the immediate future, a separate HSBC trade confidence survey showed 84 per cent of businesses anticipated trade to remain consistent or increase over the next six months.

Globally, businesses in the UAE, Saudi Arabia, Egypt and Indonesia are the most optimistic about an uplift compared with the first half of the year.

Across the longer term, the UAE's share of world trade will rise to 0.9 per cent by 2025, more than double the trade values of last year, according to the Trade Connections report. In Egypt, trade volumes will grow by 270 per cent by 2025 to reach $201.83bn.

Qatar's trade volumes are expected to grow by 160 per cent over the next 15 years to $204.2bn.

Saudi Arabia's trade volumes will expand by 72 per cent by 2025.

India will be the biggest trade partner for the Mena region over the coming decades, forecasts the report. Exports and imports between India and the region will swell by 140 per cent by 2025.

Globally, China is expected to overtake the US as the world's biggest trading partner by 2020, HSBC said. Egypt, Indonesia and Brazil would be the other big drivers of world trade.

About 6,200 companies around the world were interviewed for the Trade Connections report, with macro-economic data also included in the research.

The HSBC Trade Confidence Index surveys businesses about their forecasts for trade activity in the next six months.

The bio

Favourite book: The Alchemist by Paulo Coelho

Favourite travel destination: Maldives and south of France

Favourite pastime: Family and friends, meditation, discovering new cuisines

Favourite Movie: Joker (2019). I didn’t like it while I was watching it but then afterwards I loved it. I loved the psychology behind it.

Favourite Author: My father for sure

Favourite Artist: Damien Hurst


Energy This Week

Expert analysis on oil & gas renewables and clean energy

      By signing up, I agree to The National's privacy policy
      Energy This Week