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Egypt best reform story in emerging markets: Morgan Stanley report

Doaa A.Moneim , Friday 9 Aug 2019
File photo: The corporate logo of financial firm Morgan Stanley is pictured on the company's world headquarters in the Manhattan borough of New York City, January 20, 2015. REUTERS
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A new report by American investment bank Morgan Stanley has said that Egypt’s performance as an emerging market economy is the best globally, according to a statement on the report released by Egypt’s investment ministry.

The report, entitled Tales From the Emerging World, described Egypt as the “best reform story” in emerging markets, due to its having implemented a large number of economic reforms since 2016.

Egypt has created an investment environment friendly to the business community, Morgan Stanley’s head of Emerging Markets and Chief Global Strategist Ruchir Sharma said in the report.

There have been significant efforts to achieve financial inclusion, and the government has also succeeded in curbing the budget deficit.

Moreover, the floating of the pound in November 2016 has had a positive effect on increasing exports and the number of tourists in the country, Sharma said.

The country has attracted significant investment to its food industries sector, Sharma said, and a number of American technology companies have expanded their work in the market, with greater investments likely in the future.

In addition, there are many national mega-projects underway; 14 new cities and towns have been established and around 7,000km of new roads built, and the country’s New Administrative Capital is under construction, the report notes.

The country has decreased its reliance on oil and gas imports due to significant new investments in the energy sector, and is predicted to be getting 20 percent of its energy needs from renewable sources by 2020, with positive effects on the balance of payments.

Public debt has decreased from 108 percent of GDP to 88 percent, the report notes.

It added that consumption is no longer the growth leader as it was in 2015, as with the increasing rate of the Egyptian pound in 2019 and the full implementation of the economic reform program, consumption rates have begun to recover.

The report is “optimistic” about the future of Egypt’s economy beyond the reform phase, it noted.

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