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Sunday, 29 January 2017

With the first steps out of the way, further reforms are in the pipeline

The government has been hard at work implementing a number of reform measures over the last several months, but several more phases of reform remain in the pipeline. Upcoming phases will include legislative reform, such as with the investment and bankruptcy laws aimed boosting investments, and the tax law to overhaul the tax payment and refund system, in addition to the IPOs of public sector companies to improve the liquidity of the Egyptian stock market. Another phase will likely revolve around the overhaul of the subsidy system while expanding the country’s social safety net and make a transition to cash transfers for poor citizens. An increased financial penetration ratio is also expected, along with higher access to mortgage and SME financing and higher financial inclusion, paired with tighter risk management within banks and the strengthening of capital adequacy ratios. We believe the fruits of reform, whether in terms of a rebounding growth rate or receding inflation rates, will not appear immediately, but rather over the coming two FYs. Tap here to read the full note.

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