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Thursday, 17 February 2022

9% economic growth, hedging wheat, and privatization get air time in PM’s presser

Egypt’s economy grew at a 9% clip in 1H2021-2022, with 8.3% growth during the second quarter of the current fiscal year, Prime Minister Moustafa Madbouly said at a presser yesterday (watch, runtime: 1:09:38). By comparison, our GDP growth came in at 1.3% in 1H2020-2021, Planning Minister Hala El Said said, according to Reuters.

The 2Q2021-2022 figure is higher than was previously expected: El Said had signaled in December that GDP growth was forecast at 6-7% for the quarter. The government expects GDP growth to exceed 6% for the full fiscal year, with the third and fourth quarters now expected to register 6% or higher growth, Madbouly said.

Full steam ahead for the state privatization program: The IPOs and secondary stake sales of a handful of state companies under the privatization program are moving forward, Madbouly said. The prime minister, El Said, and Finance Minister Mohamed Maait have said in recent weeks that we should see several state listings this year.

MEANWHILE- The government is still studying potentially hedging wheat, Madbouly said, confirming a statement from Supply Minister Ali El Moselhy earlier this week that “uncertainties” in the global wheat market could require us to start hedging the commodity. Egypt first started looking into hedging against rising wheat and oil prices back in 2018.

Litmus test for the international wheat market in the meantime: State grain buyer GASC will issue a wheat tender next week to get a feel for market conditions amid the ongoing Russia-Ukraine tensions, El Moselhy told Bloomberg Asharq yesterday. The minister had signaled earlier this week that Egypt will be looking to diversify its sources of wheat imports to protect against supply shocks from Ukraine. Egypt is the largest consumer of Ukrainian wheat, purchasing the equivalent of around 14% of its total wheat consumption from the eastern European country.

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