The following text sets the context in which the briefing was given.
A resetting of Egypt’s economic landscape started to occur following a US$12 billion support programme agreement with the IMF, as well as a significant devaluation of the Egyptian Pound in late 2016. This ‘resetting’ has augmented foreign investment inflows into Egypt’s debt markets whilst also amplifying recovery in foreign direct investment; especially within the energy sector. Both inflation and interest rates appear to have peaked, so we should expect to see lower inflation and cuts in the interest rate this year and into 2019.
There are, however, a number of outstanding issues that add to the complexity of forecasting and therefore need further focus. These include: how much Egypt will benefit from recent oil and particularly large gas discoveries finds; whether the use of Egypt’s LNG facilities to re-export gas from Israel and Cyprus will produce any gains for Egypt; whether the rapidly rising population will result in new jobs having to be created even faster; and the vitally important issue of water stress. All these need to be addressed and resolved by the government in order to gain investor confidence.
- Angus Blair
- David Drury