The International Monetary Fund has upgraded its forecasts for Egypt’s real gross domestic product growth to 5.9% for fiscal year 2021/2022

Newsletter

21 Apr 2022

For our top talks today, the International Monetary Fund (IMF) has upgraded its forecasts for Egypt’s real gross domestic product (GDP) growth to 5.9% for fiscal year (FY) 2021/2022, compared to its previous projection of 5.6%, according to the IMF’s World Economic Outlook report for April 2022. The US-based international institution has also expected Egypt’s real GDP to grow 5.0% in FY 2022/2023, the report showed. The North African country’s consumer prices are projected to rise by 10.7% in FY 2021/2022, while consumer prices for FY 2022/2023 are forecast to grow 8.6%, the report added. (Arab Finance)

Additionally, the deficit in Egypt’s current account balance is projected to shrink to 4.3% in FY 2021/2022 and to 4.6% in FY 2022/2023, the IMF said, pointing out that the deficit could decline to 2.6% in 2027.
Regarding the global growth, the IMF expected it to fall to 3.6% in 2022 and 2023 from 6.1% in 2021, which is 0.8 and 0.2 percentage points (pp) lower for 2022 and 2023 than in the World Economic Outlook report for January 2022. The ongoing Russian invasion of Ukraine and the strict sanctions imposed on Russia are likely to cut global growth in 2022, the IMF said. Moreover, the global growth is forecast to slow to around 3.3% beyond 2023, the report noted. Inflation projections in advanced economies are estimated at 5.7% for 2022 due to higher commodity prices amid the Russian-Ukrainian war, while forecasts in emerging market and developing economies are estimated at 8.7%. (Arab Finance)
The Egyptian government revealed that Electricity prices were liberalized and no subsidies were directed to citizens during the last two fiscal years, so that the electricity subsidy item was recorded as zero in the final account for the years 2019-2020 and 2020-2021.
The government raised electricity prices last July, according to its plan, by between 8.5 and 26 percent for domestic use, whose subscribers are more than 28 million, while fixing the price of the industrial sector until 2024-2025. In 2020, Egypt canceled the entire subsidy for domestic consumption, which exceeds 650 kilowatt hours per month, to obtain electricity at the actual cost, while the reciprocal support from consumers continues for more than 1,000 kilowatt hours per month, and this means that they get electricity at more than the cost price in favor of supporting the least consuming segments. (Bloomberg Asharq)
On the other hand, the CEO of Orascom Development Egypt, Omar Al-Hamamsi, said that tourists from Russia and Ukraine represent 3% of the company's El Gouna resort hotels, while European tourists constitute the largest proportion of the company's hotels.
Al-Hamamsi expected that the incoming tourism movement to the cities of Hurghada and Sharm el-Sheikh on the Red Sea coast will witness a calm during the coming period, with the decrease in the movement of tourists from Europe. The Egyptian economy was affected by the Russian invasion of Ukraine, which caused the exodus of foreign investors from emerging markets, and the two countries are major exporters of wheat and tourism to Egypt. (Bloomberg Asharq)
Moreover, Al-Hamamsi said in statements to reporters, "Russian and Ukrainian tourism represent 3% of our hotels in El Gouna, so our occupancy rates are currently good, as the largest percentage of our hotel guests come from Europe,
which may witness a calm during the coming period in light of the high prices there, which will affect on the tourist movement in the cities of Hurghada and Sharm El-Sheikh. Orascom Development raised its prices between 6 and 10% after the increase in the prices of raw materials globally and locally, according to Al-Hamamsi in statements to reporters. Al-Hamamsi said that the company did not raise its sales prices at the same rate as the rise in raw materials, but rather less, and the company conducts semi-monthly price reviews, and is trying to absorb part of the increase and pass another part to the buyer. He added, "After increasing the prices of iron, cement and aluminum, we raised prices in Cairo by 10% and El-Gouna by 6%. We raised the rate of the dollar's link to the pound we have in El-Gouna to about 19.75 pounds to the dollar after the recent movement of the exchange rate. (Bloomberg Asharq)
The Egyptian government has allocated up to EGP 8 billion to disburse the new increases in wages during the fourth quarter (Q4) of fiscal year (FY) 2021/2022, according to the Minister of Finance Mohamed Maait.
The government has also dedicated a sum of EGP 2.6 billion to support the budgets of all state bodies, Maait added. These decisions came as per the directives of President Abdel Fattah El-Sisi to disburse the new increase in wages as of Wednesday, April 20th. In March, Prime Minister Mostafa Madbouli said that the government decided to apply the increase in minimum wages set for FY 2022/2023 as of April 1st, instead of July 1st, with an allocated amount of EGP 8 billion to the state’s budget. (Arab Finance)
Moving to our EGX and companies talks, the EGX announced the opening of the special operations system (OPR) for five days as of April 20th for the registration of sale and purchase orders on Nile City Investments (NCIN) at a price of 776.3 EGP /share.
This comes in accordance with the delisting process of the company’s shares from the EGX as per the provisions of Articles 53 and 53 bis. Nile City Investment is an Egypt-based public shareholding company engaged in the real estate development and investment sector. It invests in real estate developments, mainly residential, commercial, and administrative unit buildings. (EGX)
Egyptian Chemical Industries (KIMA) (EGCH) is seeking to generate 4.291 billion EGP in revenue during the fiscal year (FY) 2022/2023.
The company is targeting a distributable surplus of 426.416 million EGP in FY 2022/2023. It is worth noting that the company achieved a net profit after tax of 331.23 million EGP in H1 FY 2021/2022, versus a loss of 631.25 million EGP in H1 FY 2020/2021. KIMA is an Egypt-based nitrogen-based fertilizers manufacturing leader and is engaged in the agricultural chemicals industry sector. (EGX)
Sabaa International for Pharmaceutical and Chemical Industry (SIPC) has reported a 55.22% year-on-year decline in net profit after tax in 2021, recording 6.781 million EGP.
Revenue declined to 45.418 million EGP in the full year ended December 31st 2021, from 69.757 million EGP the year before. Saba International is an Egypt-based company is operating in the pharmaceutical sector, with a generic product portfolio that includes products focused on different therapeutic categories. (EGX)
Cairo Oils and Soap’s (COSG) extraordinary general meeting (EGM) has approved selling its factory in Cairo’s district of Ghamra.
Procedures for the transaction have not been initiated yet, and no offers were received, the company said. It is worth noting that Cairo Oils’ loss after tax hiked to 124.132 million EGP in 2021, from 78.127 million EGP in 2020. Cairo Oils, a subsidiary of the Holding Company for Food Industries, is an Egypt-based holding company engaged in the manufacture, processing, packaging, import, export, and distribution of different types of seeds for the production of oil and soap. (Arab Finance)