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Egypt to reap economic reform fruits in 2018:  El-Damaty - Daily News Egypt

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Egypt to reap economic reform fruits in 2018:  El-Damaty

Banks will focus on financing renewable energy, construction, communications sectors in coming period, while continuing to support SMEs


Sahar El-Damaty, deputy chairperson of Banque Misr, predicts that Egypt will start reaping the fruits of its economic reform programme in 2018.

She pointed out that new and renewable energy, construction, communications, and information technology are among the promising sectors that the banks operating in Egypt will focus on financing in the coming period, along with small and medium enterprises (SMEs).

What are your expectations for the country’s growth rate in 2018?

I expect Egypt to start reaping the fruits of its economic reform programme in 2018, and the GDP will witness a growth rate above 5%, while the unemployment rate will decline to 11.8%.

These predictions are based on the gradual improvements in economic conditions, the recovery of foreign exchange sources, the expected decline of petroleum imports after the start of production from Zohr gas field, the rise of remittances, and the recovery of tourism. All of this comes one year after the implementation of the economic reform programme.

What are the most important sectors that can contribute strongly to this growth? 

There are many promising sectors in Egypt, which will contribute strongly to boost the growth rate, including new and renewable energy, construction, communications, information technology sectors, as well as SMEs.

What are your expectations for the public debt and the budget deficit in 2018? 

Egypt’s foreign debt reached $79bn at the end of 2017, and this figure is expected to increase to $100bn in 2018 amid the Ministry of Finance’s tendency to issue eurobonds during the first quarter (Q1) of the year, besides the nuclear power plant loan. On the other hand, the internal debt reached EGP 3.5tn.

What are your expectations for the value of the Egyptian pound against the dollar in the new year, and why? 

I expect the local currency will continue its upward trend against the dollar, due to the steps taken by the Central Bank of Egypt (CBE) since the floatation in November 2016, when it managed to stabilise the exchange market and eliminate the informal one.

What are your expectations for inflation and interest rates? 

I expect that inflation will reach the rate targeted by the CBE, about 13%, in 2018, as a result of the structural reforms applied by the government to encourage and attract investments and control the exchange rate. In addition, the start of production from Zohr gas field will positively impact exports and imports.

This year will witness the CBE’s move to reduce its interest rates to 16.75%, according to some international reports.

How do you see the future of foreign exchange reserves in Egypt? Do you think the CBE could meet its external obligations? 

I expect foreign exchange reserves to continue to increase in 2018 based on the positive signs of the Egyptian economy.

The CBE would meet its external obligations in 2018, especially that Egypt has never delayed paying its debts.

What is the banks’ role in supporting investors and increasing lending? 

There are many promising investment opportunities in Egypt, which allow banks to expand in loans through financing large projects, public–private partnership projects, small and medium-sized enterprises (SMEs), and eco-friendly projects.

What are the most important sectors that banks will focus on financing in 2018?

The new and renewable energy, construction, and communications and information technology sectors are among the promising that banks operating in Egypt will focus on financing in the next period, along with SMEs.

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https://wwww.dailynewssegypt.com/2018/01/21/egypt-reap-economic-reform-fruits-2018-el-damaty/
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