Egypt’s GDP expected to grow 4% in FY 2024 while EGP is expected to weaken slightly
Egypt’s GDP expected to grow 4% in FY 2024 while EGP is expected to weaken slightly. Egypt’s economy is projected to grow by 4% in fiscal year 2023/24, slightly down from previous estimates, according to FocusEconomics. However, headline and core inflation have reached record highs due to foreign currency shortages and the depreciation of the Egyptian pound. The Central Bank of Egypt’s aggressive interest rate hikes have impacted investment and activity. The approved budget for FY 2024 aims to address the deficit and allocate funds for food subsidies. Although GDP growth is expected to remain stable, the country is dependent on IMF and World Bank loans to support investor sentiment and implement reforms. Inflation is predicted to remain high, and the Egyptian pound is expected to weaken further amid currency challenges. The MENA region also faces economic headwinds, including lower OPEC+ quotas, higher interest rates, and soaring food prices. Furthermore, the upcoming CBE meeting on 3 August is anticipated to bring more interest rate hikes in 2023. FocusEconomics panellists predict the Egyptian pound will continue to weaken due to the ongoing foreign currency crunch, impacting the nation’s economic stability. Amid these challenges, MENA countries are expected to experience varied inflation rates, with Egypt, Iran, Lebanon, and Tunisia facing higher rates while others may see stability or lower rates. (Daily News)
- Egypt's GASC buys 360,000 Tonnes of wheat in tender.
Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said on Wednesday it had bought 360,000 metric tons of wheat in an international tender.The purchase comprised 300,000 metric tons of Russian wheat and 60,000 metric tons of Romanian wheat, GASC said. (Reuters)
- Egypt's Non-Oil Private Sector Sees Improvement in Operating Conditions Amid Lingering Uncertainty.
The S&P Global Egypt Purchasing Managers' Index™ (PMI™) survey reveals that Egypt's non-oil private sector witnessed a milder contraction in operating conditions in July. The headline PMI reached 49.2 points, just above the previous month's reading of 49.1, still indicating contraction. Output levels and new business activities saw improvements, but firms remained uncertain about future activity, reflecting the lowest level of confidence ever recorded. Modestly rising selling prices may boost demand in the coming months, yet overall optimism remains subdued, with only 6% of survey participants expecting output growth over the next 12 months. (Bloomberg Alsharq).
- Egypt's tobacco exports reach USD 35.8 mn in a record high.
Egypt's tobacco exports in recent months amounted to $32.6 million in hookah tobacco and $114,000 in cigars. However, the local cigarette market is experiencing disruptions with some brands unavailable or overpriced. The state-owned tobacco producer, Eastern Company, denies raising cigarette prices despite reports of inflated prices in the market. The anticipation of a tax increase on cigarettes in the new fiscal year has added to the uncertainty. Minister of Finance aims to boost tax revenue from tobacco, while Philip Morris International has already increased prices for certain cigarette brands.(Al Ahram)
- Egypt Aims to Strengthen Bilateral Trade with Turkey, Targeting $15 Billion in Five Years.
Egypt's Minister of Trade and Industry, Ahmed Samir, embarked on a significant trip to Turkey, announcing plans to boost bilateral trade between the two countries from $10 billion to $15 billion within the next five years. This visit marks the first time an Egyptian Trade minister has traveled to Turkey in a decade, signaling a thaw in relations after years of tension. During the visit, discussions centered around using local currencies in trade and expanding the existing free trade agreement. Bilateral trade volume has been steadily increasing, with exports from Egypt to Turkey showing significant growth, reaching $4 billion in 2022. Turkish investments in Egypt and projects executed by Turkish contractors in the country further contribute to the strengthening economic ties between the two nations. (Al Arabia)
- Egypt's Decent Life Initiative Secures EGP 19 Billion in Financing, Reaching EGP 200 Billion Milestone.
Minister of Planning and Economic Development, Hala Elsaid, revealed that Egypt's Decent Life initiative has successfully raised EGP 19 billion in financing since March, reaching an impressive total of EGP 200 billion. The initiative, launched in 2019, is focused on improving the quality of life for the most vulnerable segments of the population, with a special emphasis on enhancing public services in rural areas. Prime Minister Mostafa Madbouly and officials convened to review the progress of the initiative's development projects during a recent meeting, highlighting the government's commitment to providing a decent life for all citizens. (Al Ahram)
- Edita considers $30M loan from IFC to support its capital expenditure requirements
The International Finance Corporation (IFC) is considering loaning Edita Food Industries (EFID) up to $30 million to fund its new capital expenditure, the IFC stated on July 31st. The $30 million loan would mobilize up to $15 million to Edita Food Industries, Edita Participation Cyprus, and Edita Trade and Distribution to fund the group's capex needs in Egypt and Morocco, working capital needs, and potential expansion in Africa and the Middle East. The IFC’s board will meet on August 31st to discuss the loan. In June, Edita announced that it is planning to invest EGP 800 million this year. (Arab Finance)
- Beltone denies applying for digital bank license.
Beltone Financial Holding has denied applying for a digital bank license, according to a bourse filing on August 1st. This came as a response to the recently published news on one of the media platforms claiming that ODE plans to obtain a digital bank licence. On July 31st, Beltone announced that it signed a memorandum of understanding (MoU) to acquire a microfinance firm licensed by the Financial Regulatory Authority (FRA). Beltone operates within the diversified financial sector. It provides brokerage, asset management, investment banking, and liquidity services in regional markets. (Arab Finance)
- Crédit Agricole Egypt Reports Strong Financial Performance in H1 2023, With Net Profits Soaring to EGP 2.51 billion.
Crédit Agricole Egypt's consolidated net profits after tax for the first half of 2023 surged to EGP 2.51 billion, marking a significant increase from EGP 1.01 billion in the previous year. The bank's net interest income also saw remarkable growth, reaching EGP 3.24 billion in H1 2023. Total assets reached EGP 93.71 billion, while clients' deposits stood at EGP 74.98 billion. The bank's standalone business showed equally impressive results, with net profits after tax amounting to EGP 2.50 billion in H1 2023, and the earnings per share jumping to EGP 1.81. (Mubasher)
- CBE auctions EGP 43bn T-bills on Thursday.
The Central Bank of Egypt (CBE) offered treasury bills (T-bills) at a combined value of EGP 43 billion through two issues on Thursday, 3 August. The first tranche stood at EGP 19 billion, holding a tenor of 182 days until 6 February 2024, according to official data. Meanwhile, the second offering was valued at EGP 24 billion and will mature in 364 days on 6 August next year. Last Thursday, the CBE issued T-bills worth EGP 40 billion through two auctions. (Mubasher)
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