FIFA defends VAR ahead of women's World Cup quarter-finals    Egypt-Germany trade volume hits 4.5 bln euros in 2018: Cabinet    Opioid use booming as tramadol crisis emerges in Africa: UN drug report    Lebanon opposes U.S. plan for Middle East – Prime Minister Hariri    UAE says 'scientific, convincing evidence' needed regarding Gulf tanker attacks    Trump: any Iranian attack on Americans will be met with ‘obliteration'    Ukraine government sets price cap for heating tariffs    Interview: Egypt targets non-financial IMF deal by October – FinMin    U.S.-China trade deal is 90% complete – Mnuchin    Martens sends Netherlands through to maiden quarter-finals    China urges Britain to stop interfering in Hong Kong affairs    European stocks to open lower after Fed cools rate cut hopes    Asian markets fall as Fed's Powell tempers rate cut expectations    Benin fight back to draw with 10-man Ghana in Nations Cup opener    BREAKING: Terrorist Hisham El-Ashmawy being retried in five cases for supporting, carrying out attacks    Egypt PM, Germany's Siemens discuss boosting cooperation    UK's BlueMac signs MOU with Egypt on establishing waste management joint venture    'Everything is stolen from us': Tunisians fight to preserve cultural heritage    Sisi praises Egyptian fans' behaviour during 2019 AFCON opener    Egypt dazzles us with a breath taking AFCON 2019 opening    Egypt makes winning start to Africa Cup of Nations    Egypt calls for speeding up talks on Ethiopia's GERD dam    Mourning a dog can be harder than losing a relative or friend    Egypt says to launch hepatitis C medical examination initiative in Africa    China needs around $440 bln to clean up rural environment – People's Daily    Egypt slams Human Rights Watch director's tweets on Morsi's    Egypt trying to halt Tutankhamun statue sale in London    20 million drug tablets smuggling foiled in Damietta    Art Alert: Little Eagles to screen at KMT    New academic year to start 21 Sept: Egypt's Supreme Council of Universities    In Photos: Egyptian Museum in Tahrir inaugurates new path for the visually impaired    Playing victim    Morsi dies    A painless commute    United against corruption    Africa welcomed home    Food on Facebook    Beef olives with an Oriental twist    Tanker war puts pressure on Iran    Losing is not an option    Promoting football tourism    Al-Sisi in Eastern Europe    Singer Nesma Mahgoub at Cairo Opera House Summer Festival    Mervat Shazly showing at Salama art gallery    The mummies go to the NMEC    Muslim Brotherhood: Playing victim    Egypt FM spokesman condemns OHCHR statement on Morsi's death for 'lack of integrity and objectivity'    Saudi Arabia celebrates Eid al-Fitr with 13 Arab artists    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.





Egypt's growth to accelerate to 5.5% in FY 2019: Standard Chartered
Fiscal consolidation is progressing, targets are ambitious
Published in Daily News Egypt on 18 - 10 - 2018

Standard Chartered Bank projected that the Egyptian economy growth will accelerate but the policy backdrop will remain challenging.
"We forecast a gross domestic product (GDP) growth of 5.5% in the fiscal year (FY) 2019 (which ends in June), picking up from an estimated 5.3% in FY 2018, based on actual government data through the first half (H1) of the FY. Public investment is boosting growth, along with the competitiveness boost to exports and tourism from the Egyptian pound's weakness," the bank stated.
According to the bank, this is helping to offset a slowing contribution from private consumption, the economy's main engine. Rising gas output is another medium-term positive.
Moreover, Standard Chartered Bank expects the consumer price index (CPI) inflation to average 14.8% in FY 2019, putting the Central Bank of Egypt's (CBE) 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 about 30% between March and July 2018. Although the EGP has remained stable so far, capital outflows will be a key monetary policy consideration, in our view," the report read.
Standard Chartered Bank sees a risk that monetary easing could be delayed beyond the fourth quarter (Q4) of FY 2019. And while the CBE's current foreign exchange (FX) reserves provide sufficient firepower, a reversal of earlier easing cannot be ruled out, should capital outflows intensify.
The report projected higher Federal Reserve interest rates, as an additional headwind to further easing in Egypt.
In addition, it added that fiscal consolidation is progressing, but targets are ambitious. "We expect the fiscal deficit to narrow to 9.2% of GDP in FY 2019, slightly above the government's 8.4% target. We think the 2% primary fiscal surplus targeted under the IMF's Extended Fund Facility (EFF) will be difficult to achieve, given that it would require subsidy cuts of 1.3% of GDP. Higher-than-expected global oil prices pose risks to our, and the government's, fiscal deficit forecasts," it explained.
While the government has entered oil-price hedging agreements to safeguard the budget, according to local media reports, Standard Chartered Bank thinks it is too early to assess the net impact on budget targets.
The IMF programme is on track, but rising external debt remains a concern. The third review of the EFF in June suggested that most performance targets had been met. A narrower current account deficit and external borrowings have helped to maintain FX reserves, which stood at $44.4bn at end-August.
"However, we are concerned about external debt, which totalled $88bn in March 2018 about 37% of GDP. Half of this is government debt, which likely increased further following a recent international issuance and the $2bn release of the IMF tranche in June."


Clic here to read the story from its source.