Back to the complete issue
Tuesday, 17 January 2017

Egypt retains highest economic strength assessment in region, risks remain -Moody’s

Moody’s has stable outlook for North Africa and Levant economies, sees Egypt growing 4-4.5%: Moody’s says a lower energy price environment as well as reform momentum in the region are the main drivers for its stable outlook for the Levant and North Africa economies. In a report on 2017 outlook for the region released yesterday, the ratings agency says “Egypt retains the region’s highest economic strength assessment, which reflects not only its scale but also its growth outlook compared to peers.” It forecasts the Egyptian economy will “grow by 4.0% and 4.5% in 2017-18, supported largely by private consumption, as well as increasing public and private investment. Conditional on a continued stabilization in the security environment, investment will be driven by infrastructure projects and the renewed development of natural resources: the Zohr offshore natural gas field has the potential to restore power supply and meet Egypt’s natural gas demands.”

In addition, “investment incentives from the recent devaluation of the EGP and shift to a flexible exchange rate system to outweigh the short-term challenges stemming from higher inflation and reduced purchasing power for domestic consumers. While tourism arrivals remain near post-crisis lows, they appear to have bottomed out in recent months.” The threats remain present in the potential for socio-economic discontent “fueled by high inflation and reduced purchasing power” and “security risks persist, as evidenced by scattered terrorist attacks targeting security forces and government officials, as well as civilians.”

Sound smart: This is the same Moody’s that agreed a couple of days ago to pay USD 864 mn or so to end a US investigation into its role in helping create the subprime mortgage crisis in the US that set off the Great Recession.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.