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Monday, 18 July 2022

THIS MORNING: IMF to downgrade global growth forecast “substantially”; Egyptians offered new round of covid boosters

Good morning, friends. We have a compact, business-heavy issue for you today after the policy- and macro-heavy reads we served up yesterday (and before the Eid break).

Before we get started, though:

PSA- Fourth covid shots have landed: People who have received three doses of a covid vaccine can now receive their fourth jabs, Youm7 reported, citing a statement from the Health Ministry. Anyone over the age of 65 or suffering from a chronic illness can get the booster if it’s been more than three months since their third shot. Everyone else will become eligible six months after receiving the third jab. The ministry has already begun administering the fourth shots, and there’s no need to re-register if you want to get jabbed.

Covid cases are on the rise nationwide, with the official case count not at about 35 new cases and five covid-related deaths each day, acting Health Minister Khaled Abdel Ghaffar said earlier this week. Remember: The official case count underestimates the true number of cases as it captures data only from government labs.

Covid patients need to quarantine for 5-7 days, head of the government’s covid committee, Hossam Hosni, told Salet El Tahrir yesterday (watch, runtime: 3:24), adding that despite the increase in reported cases, most patients are reporting comparatively mild symptoms. Hosni called on people to continue practicing preventive measures including mask wearing, social distancing, and hand washing.

Officials haven’t specified that we’re in the midst of the same BA.4 and BA.5 wave that is sweeping North America and much of Europe, but…

WATCH THIS SPACE #1: Brace yourselves for more bad news on global growth. The IMF is poised to downgrade its global economic growth outlook “substantially” later this month on the back of soaring food and energy prices, a slowing economy in China, and reduced capital flows to emerging markets, Bloomberg reports.

“It’s shock after shock after shock which are really hitting the global economy,” IMF official Ceyla Pazarbasioglu said Sunday at a panel in Indonesia following the G20 finance ministers’ meeting, which ended in division on Saturday. The IMF already downgraded its 2022 global growth forecast in April to 3.6%, from 4.4%, due to the economic fallout caused by the war in Ukraine.

The next signpost on the road: The Fund will publish an update to its World Economic Outlook on Tuesday, 26 July — a week from tomorrow.

*** WATCH THIS SPACE #2- Is the respected activist Alaa Abdel Fattah up for a pardon? That’s the contention of Tarek El Awadi, a member of the presidential pardons commission, who said on Al Kahera wal Nas’ Hadith Al Qahera that Alaa’s name is on a pardon list being prepared by the commission. Other prominent activists including Ahmed Douma are also up for pardons, El Awadi said, adding that “competent authorities” are reviewing the list and have so far raised no objections. The story is getting play in state-owned media including Al Ahram’s breaking news website as well as in Youm7.

Alaa, now a UK national, has been on a hunger strike since April and his case has in recent months won significant international media attention.


President Abdel Fattah El Sisi is co-chairing this year’s Petersberg Climate Dialogue alongside German Chancellor Olaf Scholz, Ittihadiya said in a statement. The two-day event starts today in Berlin and is one of several international climate meetings ahead of COP27 in November.

Egypt will play Cape Verde in the final of the 2022 African Men's Handball Championship today at 9pm. A victory for the Pharaohs would see them claim the title for the second year in a row. The national team sealed their place in the final on Saturday by beating Tunisia, a match that also secured a berth in the 2023 championship.


GASC goes direct to some far-flung wheat suppliers: State grain buyer GASC is again looking to purchase more wheat directly from traders and will tomorrow invite offers from suppliers in the US, Canada, Australia, Argentina and Brazil, it said on its website. GASC wants offers on a cost and freight basis to be shipped in September-November. The authority has, by our math, bought more than 500k tons of wheat outside the normal tender process this month (here and here) and has sought to diversify its suppliers following the outbreak of war in Ukraine.


Russian President Vladimir Putin is coming to our neck of the woods(ish). Putin will meet with his counterparts in Iran and Turkey as the Kremlin ups efforts to court global south allies in the wake of its rift with the West, the Wall Street Journal reports. The rare diplomatic visit — only Putin’s second since Russia went to war in Ukraine — will start on Tuesday in Tehran.

Cold War diplomacy vibes: The visit comes hot on the heels of US President Joe Biden’s visit to the Middle East, where he also sought to firm up ties with regional allies and counter the growing influence of China and Russia.

THE BIG STORY ABROAD- There’s no single story dominating the international front pages this morning:

  • The latest from Ukraine: President Volodymyr Zelenskiy has fired his national security head and chief prosecutor while Russia prepares the next phase of its push to seize the entirety of the Donbas. (Reuters | AP | Bloomberg)
  • US media is focused on a report published yesterday on the mass shooting in Uvalde in May, which found “systemic failures” in how the police responded to the situation. (Washington Post | NYT)


The global financial press is fretting about two things this morning:

#1 The red-hot greenback: The USD posted its strongest first half in more than a decade this year, rising to its highest level in 20 years as the Federal Reserve hikes interest rates and unease about the direction of the global economy grows. The EUR reached parity with the USD for the first time since 2002 last week and the USD-JPY rate is at its highest in 24 years. That sees Bloomberg reporting that the strengthening greenback has triggered capital flight from Asian equities (excluding China) to the tune of USD 71 bn so far this year.

The doom loop: Hedge fund advisor Jon Turek tells the business newswire that we’re entering a “USD doom loop” where the strengthening currency becomes self-reinforcing. “We have a European problem, which creates pressure on the euro, which sends the dollar higher, which worsens the manufacturing cycle, which does this whole thing again,” he says. “It’s a little hard to see what kind of stops this.”

Everyone’s feeling the pressure: Commodity importers (us), countries with USD-denominated debt (us), and the US’ top trading partners are all feeling the pain as currencies across the world fall heavily against the greenback. The Wall Street Journal and the Washington Post are also out with pieces examining the currency’s ascent.

#2 Corporate earnings: US earnings season continues this week, and — among the other headwinds currently threatening businesses — the USD is expected to have weighed on corporate revenues in the second quarter. “The USD is definitely going to be a huge earnings headwind,” one analyst told the Wall Street Journal.

It hasn’t been a great start to earnings season: “Lackluster,” “inauspicious,” and “slow” all find their way into the Wall Street Journal’s coverage of the first week of 2Q earnings, which saw JPMorgan, Chase and Delta Airlines all warn about hard times ahead. Of the few S&P 500 companies that have released their earnings for the second quarter of the year, nearly 60% beat earning expectations in comparison to the usual 77% recorded over the past five years on the back of rising costs.


State’s national dialogue meetings to resume on Tuesday: The board overseeing the Sisi administration’s national dialogue will hold its second meeting this week, during which it will set a schedule of debate, discuss the agenda and form subcommittees.

Need a refresher on the national dialogue? We’ve got you covered.

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


*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed. Blackboard appears every Monday in Enterprise in the place of our traditional industry news roundups.

In today’s issue: The skill gap between what Egypt’s fresh graduates need in the workforce and what they leave university with is often cited as a reason for poor performance or low productivity. So Enterprise asked representatives from a range of sectors what exactly they look for in the fresh graduates they hire. Their answers? Although different sectors sometimes require quite different skills and experience, candidates who are proactive and understand the broader meaning behind the tasks they work on will go much further than those who rely on being spoon fed instructions, they say.

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