Egypt

Content type

Egypt With Weaker O&G Output Growth Over 2022, Increasing Upside Risks For The Long-Term Forecast

Fitch Solutions / Article / Oil & Gas / Egypt / Thu 11 Aug, 2022

Key View

  • Egypt's oil and gas production will see slower growth over 2022 amid underperformance over January-May 2022.
  • We continue to expect some growth in Egypt over 2022 on the back of some new upstream developments, improved contractual terms for some producers and announcements from some players on increased spending and higher output guidance in this country.
  • We remain rather bearish in our long-term oil and gas production forecasts for Egypt on the back of muted investment in mature fields which see steep output declines.
  • However, exploration plans announced by upstream companies in Egypt and growing demand for LNG globally
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IMF, GCC Funding Will Ease Pressure On Egypt's External Position, But Timing Is Critical

Fitch Solutions / Article / Country Risk / Egypt / Wed 03 Aug, 2022

Key View

  • At Fitch Solutions we foresee limited improvement in Egypt’s current account deficit due to a higher import bill and a slower recovery in the tourism sector.
  • An IMF programme and other multilateral funding, along with foreign direct investment, and followed later on by debt issuance will allow Egypt to cover its external financing needs.
  • Egypt’s very thin external buffers reduce the margin for policy errors or delays in securing an IMF programme. In this case, pressure on the reserves will intensify and the currency will further weaken.

At Fitch Solutions we believe that multilateral funding and foreign direct investments

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More Hikes Still On The Table In Egypt

Fitch Solutions / Article / Country Risk / Egypt / Thu 28 Jul, 2022

Key View

  • We at Fitch Solutions anticipate that the Central Bank of Egypt will increase its overnight deposit and lending rates policy rates by 100bps each over the remainder of 2022, to 12.25% and 13.25% respectively.
  • Above-target band inflation will provide impetus for hiking. After averaging 11.1% y-o-y in H122, we forecast inflation will average 15.2% in H222 (13.2% in 2022 as a whole).
  • Concerns over chocking off economic activity and further increasing the debt servicing bill will discourage more aggressive hiking. Higher rates will also do little at this stage to encourage the portfolio investors to return.

After hiking by a

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Egypt's Aggressive Hiking Cycle Could Be Over

Fitch Solutions / Article / Country Risk / Egypt / Fri 24 Jun, 2022

Key View

  • At Fitch Solution we continue to expect that the Central Bank of Egypt will hike by 100 basis points in H222 in a bid to bring back inflation within its 5.0%-7.0% target band.
  • That said, we see rising risks to this view from easing inflationary pressures and rising debt servicing cost.
  • Additionally, higher rates will do little at this stage to encourage portfolio investors to return.

At Fitch Solutions we see rising risks to our view that the Central Bank of Egypt (CBE) will hike by an additional 100 basis points in H222 2022. On June 23, the Central Bank of Egypt (CBE) maintained its overnight deposit and lending rates

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Egyptian Vehicle Sales To Decline As Economic Growth Slumps

Fitch Solutions / Article / Corporates / Egypt / Fri 25 Mar, 2022

Key View

  • Higher commodity prices, rising inflation, and lower tourist inflows will result in weaker vehicle sales. We expect that these factors will depress consumer spending and reduce vehicle affordability as automakers increase sales price to reflect the rising cost of manufacturing.
  • Exacerbating the downbeat outlook for vehicle sales is the perpetuation of the global semiconductor shortage, which has been restricting the supply of new vehicles from popular automakers, such as GB Autos and Abou Ghaly Motors, since Q421.

We believe that both the demand for, and supply of new vehicles in Egypt will worsen in 2022 which will see

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More Hikes Ahead For Egypt's Central Bank

Fitch Solutions / Article / Banking & Financial Services / Egypt / Mon 21 Mar, 2022

 

Key View

  • We at Fitch Solutions anticipate the Central Bank of Egypt (CBE) will tighten monetary policy by another 100 basis points (bps) by end-2022, after a 100bps hike on March 21.
  • Higher inflation and increased risk-off sentiment towards emerging markets will put downward pressure on the Egyptian pound, providing impetus for the CBE to hike again.
  • Meanwhile, after authorities signaled they would allow more exchange rate flexibility, permitting the exchange rate to sell-off by nearly 14.0% on March 21, we believe further monetary tightening and a new deal with the IMF – which we see as increasingly likely – will limit
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Russia-Ukraine War Will Hit Egypt's External Position Through Multiple Channels, Weighing On Currency Outlook

Fitch Solutions / Article / Country Risk / Egypt / Fri 11 Mar, 2022

Key View

  • We at Fitch Solutions anticipate that Russia’s invasion of Ukraine will result in a wider current account deficit in Egypt, coming in at 4.3% of GDP in FY2021/22 (July 2021 – June 2022) and 4.2% of GDP in FY2022/23.
  • Higher wheat prices will increase the import bill while reduced tourist arrivals from the two countries will depress service exports.
  • Global risk aversion and financial tightening have reduced capital inflows to Egypt that are needed to finance its current account deficit and preserve the stability of the exchange rate.
  • As such, we now think that reaching an IMF agreement that would reassure investors is very
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Egypt Set For Strong Growth Driven By Investment In 2022, Private Consumption In 2023

Fitch Solutions / Article / Country Risk / Egypt / Wed 09 Feb, 2022

Key View

  • At Fitch Solutions, we expect strong investment and exports of goods and services will drive a pick up in Egypt's real GDP growth from 3.3% in FY2020/21 to 5.4% in FY2021/22.
  • In FY2022/23, we forecast growth of 5.5%, with private consumption being the main driver. This will be supported by an adjustment to the minimum wage, easing inflationary pressures, fading base effects and strong remittance inflows.
  • A new Covid-19 variant or more aggressive monetary tightening are key downside risks to the outlook.

At Fitch Solutions, we expect that Egypt’s economic growth will accelerate from 3.3% in FY2020/21 (July 2020-June 2021)

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Egypt's Growing Commitment To Healthcare Will Boost Investment In The Sector

Fitch Solutions / Article / Pharma & Healthcare / Egypt / Tue 25 Jan, 2022

Key View

  • Growing government commitment to healthcare will benefit the expansion of universal healthcare coverage, the adoption of strategic partnerships and increased pharmaceutical investment.
  • Alongside this, improving the health of the population is increasingly becoming a priority for Egypt’s government, in line with the UN’s Sustainable Development Goals (SDGs).
  • While we forecast solid double-digit growth in government healthcare spending, the private sector will continue to account for the majority of healthcare spending.

Growing government commitment to healthcare will benefit the expansion of universal healthcare coverage

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Egypt Petrochemicals Profile: Sidpec

Fitch Solutions / Article / Petrochemicals / Egypt / Tue 18 Jan, 2022

Strengths

  • Egypt's sole ethylene producer.
  • Market leader in polyolefins with a portfolio including polyethylene and polyvinyl chloride.

Weaknesses

  • Lack of clarity over future expansion plans.
  • Despite being Egypt's dominant petrochemicals producer, it is unable to keep up with the pace of domestic demand growth.

Opportunities

  • Partner in a planned petrochemicals venture, including 460,000tpa ethylene capacity, which could provide the basis for product diversification.

Threats

  • Vulnerable to the political and economic
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