HSBC is bullish on Egypt: Egypt’s economic growth has been extremely impressive, HSBC Senior Economist Razan Nasser tells Bloomberg TV. This is particularly reflected in Egypt’s account deficit, which shrank by 64% in 1H2017-18 on the back of better tourism, remittances and export figures.

Further structural reforms needed: Overall, while Nasser is bullish on Egypt’s growth, she says that the economic gains have primarily been cyclical. Further structural reforms will be needed, and that might be a challenge, as these are under fewer time constraints and their impact won’t be felt in the short term, she says.

As for the monetary easing cycle, Nasser sees the interest rate cuts are a welcome relief, expecting another 200 bps cut this year. The 700 bps hikes in interest rates following the EGP float had been painful on the government as well, as debt service makes up a third of public spending. These cuts are justified when looking at the lower inflation figures. These have also been reflected in the PMI reading in March, which despite falling to 49.2, saw both input prices and output charges increasing at softer rates in the non-oil private sector, she added.

Inflation continues to be a risk, warned Nasser, who added that “we shouldn’t get complacent.”

Carry trade won’t be harmed by the rate cuts: While she doesn’t expect the carry trade to continue at the same rate as yields drop, Nasser said that Egypt’s fundamentals will continue to help make Egypt attractive. You can check out the full interview here (watch, runtime: 5:08).