It is vital that Egypt’s planned eurobond issuances succeed, Pharos Holding COO Angus Blair tells Bloomberg TV. Blair says the reliance on a successful eurobond issuance comes as interest payments on EGP-denominated borrowing has increased with the interest rate hikes and added pressure on the budget. The high interest rates are not just adding fiscal pressure, but also impacting the private sector. “I keep being asked … how on earth can Egypt have such strong growth of about 4.5% and yet a negative PMI? And it is because the private sector is hurting from the high interest rates,” Blair notes. He believes that it is important for the central bank and the Finance Ministry to work together on bringing the interest rates down in “a calm manner, while trying to boost private sector investment.”

Investment is key to sustain Egypt’s “manufacturing boom,” according to a Capital Economics report. “The recent rapid pace of growth will be difficult to sustain in the absence of a significant pickup in investment,” the report says, noting that manufacturing output was up 43.3% y-o-y. Spare capacity may be already used up, the report suggests, and so firms will need to invest in new facilities, but investment remains subdued for the time being. Capital Economics believes that there are grounds for optimism that investment into the manufacturing sector will strengthen.