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Thursday, 10 June 2021

THIS MORNING: Inflation figures should land today; G7 kicks off tomorrow; BTC is now legal tender in El Salvador.

Good morning ladies and gents — and that’s almost a wrap on another busy week of news in Om El Donia.

But before we kick back for the weekend, we have the small matter of May’s inflation figures, which should be out this morning. The release, coming just a week before the MPC meeting, may be instructive as to what the central bank may do with interest rates a week today. Whether we see another unexpected slowdown akin to last month or whether the global rise in commodity prices finally begins to seep into the Egyptian economy may be the difference between a cut and a hold. We’ll be out with our usual interest rate poll ahead of the MPC meeting next week, and look for coverage on inflation in this afternoon’s PM edition.

WHAT ELSE IS HAPPENING TODAY-

Manufacturers may be in line for a property tax break: A proposal to move forward with a plan to calculate property taxes on factories based on the construction cost rather than market value is set to be discussed during a meeting of cabinet’s economic group later today. It comes amid calls from manufacturers and exporters to scrap the real estate tax on factories altogether.

Also on the agenda: Look for a more favorable timeline for businesses to remit value added taxes (VAT), and measures to reduce the time needed for goods to be released from ports.

***CATCH UP QUICK with the top stories from yesterday’s edition of EnterprisePM:

  • Manufacturing galore: Ain Sokhna could be home to a new Polish industrial zone spanning up to 1 mn sqm, while Elaraby Group plans to establish in 2022 an industrial complex for household appliances.
  • Post-covid business climate isn’t getting any better, but firms remain hopeful: The ECES’ business barometer stayed unchanged from the previous quarter at 47.0 in 3Q2020-2021, three points below a 50.0 “neutral level,” but things are set to improve this quarter.
  • We’re a bit closer to landing a USD 400 mn World Bank loan: The facility, which would help support the rollout of the Sisi administration’s national health ins. system, was approved by the House Health Committee.

THE BIG STORY INTERNATIONALLY #1: The 2021 G7 summit kicks off in the UK tomorrow — and we’re already getting an idea about what to expect. The seven wealthy nations that make up the group will pledge to ship at least 1 bn extra shots of covid vaccines to developing countries over the next year, according to a draft communique seen by Bloomberg.

Half of this may be coming from the US, which will apparently purchase 500 mn more doses of the Pfizer vaccine and distribute it to developing countries through the Gavi / Covax scheme, a source told the Associated Press yesterday.

Also from Bloomberg on the G7:

  • Climate: Expect an announcement on new funding for green projects in developing countries, and a statement on electric cars;
  • Pressure on China + Russia: The countries will apparently look to ramp up pressure on Beijing by calling for a new enquiry into the origins of covid and Moscow over its alleged involvement in recent cyberattacks;
  • The glaring omission: Notably, there’s no mention of last week’s corporate tax pact, that saw G7 countries reach a preliminary agreement about introducing a minimum global tax on multinationals.

THE BIG STORY INTERNATIONALLY #2: El Salvador is embarking on a wild experiment: El Salvador has become the first country to accept bitcoin as legal tender after its parliament passed legislation yesterday that paves the way for goods to be bought, taxes to be paid and loans to be issued using the highly-volatile digital asset. The bill, brought to MPs earlier this week by the country’s president, will require businesses to accept BTC as payment in the next 90 days, while maintaining the USD as legal tender. Eagerly showing off his laser eyes on Twitter, President Nayib Bukele said crypto would “bring financial inclusion, investment, tourism, innovation and economic development” for the central American country.

The story dominated the global press for much of yesterday, with everyone from Reuters and Bloomberg to the Financial Times and the Wall Street Journal giving the news digital ink.

Other stories worth your attention this morning:

  • In a further demonstration of how difficult a global corporate tax pact is going to be to agree…: The UK is now demanding that the City of London get a pass from the G7’s plans to introduce a minimum global corporate tax rate, just a few days after signing onto the accord. (Financial Times)
  • US plans anti-China tech splurge + Trump TikTok ban dropped: New legislation approved by the US Senate to counter the ascendancy of Chinese tech would unlock USD 250 bn for developing US technology and research. This came as the Biden administration revoked Trump-era orders to ban Chinese apps TikTok + WeChat from the US. (Reuters | AP)
  • Alexa, how do I beat an antitrust lawsuit? European regulators may seek to curb the market power of voice assistants such as Apple’s Siri, Alphabet’s Google Assistant and Amazon’s Alexa, after a year-long inquiry found evidence of anti-competitive practices by the tech firms. (Reuters)

CIRCLE YOUR CALENDAR-

The Central Bank of Egypt will meet Thursday, 17 June to review rates.

The Entering African Markets exporter training program continues today, according to a press release (pdf). The program was launched by the International Islamic Trade Finance Corporation in cooperation with the Egyptian Export Development Authority.

Egypt is hosting the first forum of the heads of African investment promotion agencies from 11-14 June in Sharm El Sheikh under the theme “Integration for Growth,” according to a cabinet statement. Ministers and heads of investment agencies from 34 African countries are expected to attend.

SMEs in the tourism sector have until 20 June to apply for the six-month Tourism Recovery Program launched by Enpact and the TUI Care Foundation and supported by GIZ, according to a press release (pdf). Some 100 small firms will be given direct support to the tune of EUR 9k each. The program also aims to create an international network of tourism business to expand cooperation between Egypt, Germany, and other European countries. You can apply here.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

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