Trade between the United Arab Emirates (UAE) and Malaysia hit 12.61 billion dirhams (3.44 billion U.S. dollars) in 2006, growing 20.65 percent compared with 10.45 billion dirhams in 2005, local newspaper Gulf News reported on Monday.

"The UAE was our biggest trading partner in the Arab region in 2006 and ranked 22nd globally," Ahmadur Rahman, marketing manager of the Malaysian Trade Center in Dubai, was quoted as saying.

According to the Malaysia External Trade Development Corporation (MATRADE), Malaysia's exports to the UAE rose to 8.85 billion dirhams in 2006, 18.79 percent up from 7.45 billion dirhams in 2005, the report said.

The Southeast Asian country registered imports of 3.76 billion dirhams from the UAE in 2006, increasing 25.33 percent compared with 3 billion dirhams in 2005.

The UAE's top exports to Malaysia were crude oil and other petroleum products, while major imports from Malaysia were furniture, jewelry, machines, consumer electronics and palm oil.

"The ongoing construction boom has increased the UAE's imports. There is a higher demand for Malaysian goods," Rahman added.

According to MATRADE, Malaysia enjoyed trade surpluses with the UAE and Qatar in the Gulf region and recorded trade deficits with Saudi Arabia, Oman, Kuwait and Bahrain as high oil prices inflated its import bill. (1 U.S. dollar = 3.67 dirhams)