Investment in Egypt
Egypt - Investment
Economic growth remains robust despite slowing slightly in Q1 FY 2020
The economy expanded 5.6% in the first quarter of FY 2020, which ran from July to September, from the same period a year earlier. This was slightly slower than the 5.7% growth rate achieved in the previous quarter.
Although comprehensive data is not yet available, the government said the internal trade, agriculture, real estate, industry and communication sectors were the main drivers of growth. In expenditure terms, private consumption was likely strong, given that inflation slowed significantly in Q1 FY 2020 and the unemployment rate dropped to 7.5% in the fourth quarter of FY 2019, marking at least an over one decade low. Meanwhile, the Central Bank of Egypt’s interest rate cutting drive this year appears to have fed into strong bank lending in the first two months of Q1 FY 2020, supporting fixed investment. Recent improvements in the ease of doing business in Egypt, as highlighted by the World Bank’s October Doing Business report, should also have energized fixed investment. On the external front, however, a stronger Egyptian pound against the USD likely restrained export growth.
Economic growth is primed to slow slightly in the coming quarters, although it should remain firm nonetheless. A downtick in global growth, partly due to trade tensions between the U.S. and China, is likely to have a chilling effect on demand for Egyptian exports, as should the recent strengthening of the Egyptian pound, although it is forecast to weaken again going forward. However, historically low inflation, lower interest rates and improvements in the ease of doing business should all underpin growth in FY 2020.
FocusEconomics panelists expect GDP to expand 5.5% in FY 2020, which is unchanged from last month’s forecast, and 5.4% in FY 2021.
Egypt - Investment Data
|Investment (annual variation in %)||-||-||-||-||-|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||13.70||0.0 %||Dec 31|
|Exchange Rate||16.04||0.0 %||Jan 01|
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February 20, 2020
At its monetary policy meeting on 20 February, the Central Bank of Egypt (CBE) left all interest rates unchanged for the second consecutive meeting.
February 15, 2020
Consumer prices increased 0.7% in January from the previous month due to higher food and beverage prices, contrasting the 0.2% month-on-month decrease in December, according to a monthly inflation note released on 15 February.
February 5, 2020
Egypt’s Purchasing Managers’ Index (PMI), which measures business activity in the non-oil private sector, dropped to 46.0 in January from 48.2 in December, indicating a worse deterioration in business conditions in the sector over the previous month and the lowest reading in over two and a half years. Contributing to the downturn in January was the fastest contraction in output among Egyptian businesses in three years, which was largely due to a sharp fall in new orders, partly due to softer export demand for the fourth consecutive month.
January 16, 2020
The Central Bank of Egypt (CBE) held interest rates steady at its monetary policy meeting on 16 January, leaving the overnight deposit rate at 12.25%.
January 9, 2020
Consumer prices decreased 0.2% in December in month-on-month terms, after decreasing 0.3% in November.