Egypt’s businesses are more optimistic about their future than they were a year ago and their expectations for sales growth are the strongest in the Middle East, according to a new HSBC report released on Tuesday.
The latest HSBC ‘Navigator: Now, next and how’ survey of over 9,100 companies in 35 countries and territories found that 64 percent of businesses in Egypt are more optimistic now than they were this time last year.
"88 percent of survey respondents expect their sales to rise over the next 12 months, making Egypt’s businesses the most optimistic compared to other surveyed countries in the Middle East, such as the UAE, Turkey and Saudi Arabia," the report said.
According the report, two in five Egyptian businesses expect to grow by 15 percent or more, compared to only a quarter globally and one-third in the Middle East.
Country Head of Commercial Banking at HSBC Egypt Richard Lelong said that due to the strength of Egypt’s economy, businesses in Egypt are becoming more confident about growth.
The survey found that 87 percent of Egypt’s businesses expect international trade growth – consistent with the rest of the Middle East. This is driven by the desire to enter new markets ahead of competitors, and proven customer demand. Eight out of 10 see international trade as a force for good, adding that it will drive innovation, improve efficiency and provide new business opportunities.
"Although three quarters of Egypt’s businesses surveyed say protectionism is increasing in their key markets, most believe there is more to gain than to lose. Strategies being deployed to cope include increasing capital reserves (36 percent) and reducing borrowing (29 percent)," the report said.
"Although short-term pain associated with economic reforms has undoubtedly been challenging, the underlying strength they are intended to deliver to the country should provide a firm foundation for future growth and business dynamism. The country is also becoming much more business friendly, with new investment and licensing laws boosting domestic and foreign business activity. All these factors are driving business optimism for future growth," Lelong said.
On the other hand, Country Head of Global Trade and Receivable Finance at HSBC Egypt Chaker Zeraiki said that Egypt’s ideal location, being a global gateway and the connection point for business across Africa and the Middle East, means that companies in Egypt will always have the flexibility they need to future-proof their growth.
"We also expect technology, digitisation and data to play an increasingly important strategic role enabling businesses to develop their products and services, reach new customers and cut costs by improving operational efficiency," Zeraiki said.