Back to the complete issue
Wednesday, 15 March 2017

Frontera News takes a dim view of Egypt’s reform agenda

Frontera News takes a dim view of Egypt’s reform agenda: London-based and EM-focused business analysis firm Frontera News appears to take a less than optimistic view of Egypt’s progress on the economic front, postulating in a series of articles that the country is locked between the proverbial rock and hard place of appeasing the poor and attracting investments. It describes the reform process as slow, with the biggest challenge to its progress being the government backtracking or slowing down the pace of subsidy reform due to a rising inflation rate and public outcry. Frontera noted the public backlash against Supply Minister Ali El Moselhy’s attempt to cut bread rations and the subsequent backtracking. It feels that if more urgency on reform isn’t taken, Egypt risks losing subsequent payments from the IMF’s USD 12 bn facility signed last November.

Frontera expects Egypt’s economic growth to be relatively low, but predicts inflation willfall this year, citing FocusEconomics’ forecast that GDP will grow marginally in FY2017-18 to 3.8% from 3.4%. The challenge for the CBE is choosing between curbing price rise and dampening economic growth. These contrarian views don’t appear to be reflected in its analysis of the EGP float. The strength of the EGP will be used as a barometer by foreign investors: the weaker, the better.

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; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.