Egypt's core inflation to reach 8% by end of 2019, interest rates to decline by 0.5%: Faros
Doaa A.Moneim, , Monday 14 Oct 2019


Egypt's economic indices are witnessing significant progress driven by the increase in public sector investments, a slow down price hikes, the curbing of the budget deficit, and restructuring the subsidies system, head of equity research at Faros Holding for Financial Investments Radwa El-Swaify told Ahram Online on Monday.

El-Swaify said that Egypt's economy has also seen a push from the improvements in social support, including pensions and wages, as well as the increase in the tourist flow to Egypt, the stable rate of remittances from abroad, the trade balance improvement, and the increase in non-petroleum exports.

"All these achievements increase trust for investors and businessmen in Egypt's economy, so Middle Eastern funds announced recently that they plan to increase their investments in Egypt due to its improved economic indicators," El-Swaify said.

El-Swaify also anticipated that the core inflation rate will reach 8 percent by the end of 2019, the interest rates will declined by 0.5 percent (50bp), while the government public debt-to-GDP ratio will fall on the medium and long terms.

Egypt's core inflation edged up to 8.83 percent year-on-year in August from 8.54 percent in July.

Last week, Egypt reached its lowest headline inflation rate in almost seven years, paving the way for further interest rate cuts, moreover, Egypt's budget deficit declined to EGP 39.172 billion in July 2019 compared to EGP 51.514 billion in the same month of 2018, declining by 6 percent of GDP according to Egypt's finance ministry.

Middle Eastern funds have announced that they are planning to increase their investments in Egypt despite recent political protests, while keeping their exposure in the rest of the region at current levels, according to a Reuters poll.

Five of nine managers polled said they would increase their investments in Egypt despite protests last month, amid improved economic indicators.

Last week, Egypt reached its lowest headline inflation rate in almost seven years, paving the way for further interest rate cuts, moreover, Egypt's budget deficit declined to EGP 39.172 billion in July 2019 compared to EGP 51.514 billion in the same month of 2018, declining by 6 percent of GDP according to Egypt's finance ministry.

Meanwhile, Egypt's government budget is expected to be -7.20 percent of GDP by the end of the current fourth, while in the long-term, it is projected to trend around -6.30 percent of GDP in 2020, according to trading economics.

http://english.ahram.org.eg/News/352788.aspx