Egypt: Stable growth amid global headwinds – Standard Chartered

Bilal Khan, Senior Economist at Standard Chartered, expects Egypt growth to accelerate but suggests that the policy backdrop to remain challenging.

Key Quotes

“We forecast GDP growth of 5.5% in FY19 (year ending June 2019), picking up from an estimated 5.3% in FY18 (the government’s estimate based on actual data through H1-FY18).”

“Inflation targets are within reach; central bank to remain on hold in 2018. We expect CPI inflation to average 14.8% in FY19, putting the Central Bank of Egypt’s (CBE’s) inflation target of 13% (+/- 3ppt) within reach. Nevertheless, we expect interest rates to stay on hold in 2018 amid weak financial-market sentiment towards emerging economies; foreign holdings of Egyptian treasury securities declined by c.30% between March and July 2018.”