The UK’s exports to Egypt grew by approximately 15% in 2014, while Egyptian exports grew by over 30%, according to the Egyptian-British Chamber of Commerce (EBCC)’s quarterly report.
The report outlines Egypt’s economic outlook and provides statistical information on trade between the two countries between January and September 2014.
In 2014, trade volume between the two countries is expected to surpass $2bn for the first time in history, according to the report.
Turmoil from the 25 January Revolution caused a serious drop in trade between Egypt and UK. The report, however, said that a rapid recovery and growth in the second half of 2014.
They expect growth of 6.7% in the fourth quarter (Q4) of 2014, compared to Q3 2014, equating to an expected growth of 24.7% in the upcoming quarter compared to Q4 2013.
“The quick launch of the Suez Canal project (August 2014) and an increased confidence of Egyptians in economic recovery lead us to predict a continuous trade growth between Egypt and the UK in 2015,” the report said.
Egypt’s economic growth has started to pick up as real GDP grew by 3.7% year-on-year during Q4 2014, up from 2.3% in the previous quarter, according to the report.
Stating evidences of the economic recovery, the report said that domestic investors are showing confidence in the economic recovery of Egypt. The recent issuance of Suez Canal investment certificates to retail investors was met with high demand and yielded the equivalent of $8.5bn within one week.
“Furthermore, the expansion of the Suez Canal and development of the surrounding area will be a central supporting factor for economic growth and employment over the next five years at least,” it added.
The chamber said that they have witnessed a gradual recovery as Egypt’s share of MENA imports from the UK increased from 3.8% to 5.8%. Egypt’s share of MENA exports to the UK increased from 3.8% to an impressive 6.3% year-on-year.
However, UK exports to the MENA region declined by 22% in Q1 to Q3 2014 compared to the same period in 2013. The results were mixed across the region, the most significant decreases were recorded in the United Arab Emirates (-45%) and Israel (-22%). Both Morocco (+37%), Qatar (+23%), and Egypt (+17%) saw a positive change in trade volume, according to the report.
Meanwhile, UK Imports from the MENA region declined by 19% in Q1 to Q3 2014 compared to the same period a year earlier.
The UK exports primarily machinery parts that are assembled in Egypt and re-exported globally as the cost of assembly (labour, land and utilities) is significantly lower in Egypt than in the UK, the report said. Export of machinery parts continues to grow by over 27% in Q1 to Q3 2014, compared to the year before.
In Q1 to Q3 of 2014, Egyptian export of mineral products witnessed a strong increase, including materials for the construction industry such as cement, ore, slag and ash. Export of this commodity increased by over 260%, making it Egypt’s number one export product to the UK, according to the report.
The report forecasts the UK, the largest foreign investor in Egypt, exports will grow by 1.9% and imports will grow by 1% in 2014. In 2015, they forecast exports will grow by 4.2% and imports by 3.7%.
UK investors’ confidence has gradually picked up, after being negatively affected by the global recession, from Q2 2013. However, the confidence has dropped a little in Q3 2014 as a result of the UK growth slowdown.
Meanwhile, the World Trade Organisation forecast a pickup in the volume of world trade to 4.7% in 2014 and 5.3% in 2015.