A macroeconomic review issued by Pharos Holding paints an optimistic portrait of Egypt's economy, a position at odds with the overwhelmingly negative reports observers have become accustomed to since 25 January.
The report, issued Monday, claims that the worst of post-revolution economic turbulence has passed and the "green shoots of international financial assistance [have] started to bloom". It cited several "unmistakeable" indicators to support its optimistic stance.
According to Pharos, the flow of funds to Egypt, both through loans or grants from donors is supporting Egypt's struggling foreign reserves. The rate of depletion for the reserves significantly declined to US$ 0.8bn in May, which the report attributes to the US$0.5bn financial Saudi assistance package which the Central Bank of Egypt says has been disbursed.
Another indicator cited is the resumption of lending activities by Egyptian banks on both retail and corporate levels. Several major syndicated loans have been announced recently, such as for an LE7.2bn facility for the Egyptian Company for Polyethylene in which the National Bank of Egypt, along with three major private sector banks, are participating.
Also, the government's large lending appetite, aided by the pickup in lending activities has pressured financing sources for banks and resulted in a boom in competition for deposits; which banks are handling through hiking interest rates.
Another reason for optimism cited by the report was the success of big Egyptian institutions in restructuring sizeable short-term facilities, such as
Egyptian General Petroleum Corporation and Egypt's National Company, which managed to restructure US$ 3 billion of its foreign debt, moving repayment to 2013 instead of 2011.
Tourism recovery, aided by the lifting of the travel ban to Egypt by all countries, seems underway, with the number of tourists improving steadily since February, reaching 800,000 in April up from 200,000 two months earlier. Another indicator is the government's efforts to boost tourism such as proposals for granting Arab nationals visas upon arrival.
The report also brought up some general but interesting observations regarding improvements in business activity in Egypt. They used two indicators; the airing time of non-food commercials on Egyptian television and the appearance of job advertisements in major newspapers. These indicators have shown significant improvement say experts in the two fields.