Egypt After 2025: Navigating a Critical Inflection Point    Spot Gold, futures slips on Thursday, July 17th    Egypt's EHA, Huawei discuss enhanced digital health    Egypt expresses condolences to Iraq over fire tragedy    Egypt, Oman discuss environmental cooperation    Egypt's Environment Minister attends AMCEN conference in Nairobi    At London 'Egypt Day', Finance Minister outlines pro-investment policies    Sukari Gold Mine showcases successful public–private partnership: Minister of Petroleum    Egypt's FRA chief vows to reform business environment to boost investor confidence    Egyptian, Belarusian officials discuss drug registration, market access    Syria says it will defend its territory after Israeli strikes in Suwayda    Pakistan names Qatari royal as brand ambassador after 'Killer Mountain' climb    Health Ministry denies claims of meningitis-related deaths among siblings    Sri Lanka's expat remittances up in June '25    EU–US trade talks enter 'decisive phase', German politician says    Egypt's Health Min. discusses drug localisation with Sandoz    Needle-spiking attacks in France prompt government warning, public fear    Foreign, housing ministers discuss Egypt's role in African development push    Korea Culture Week in Egypt to blend K-Pop with traditional arts    Egypt, France FMs review Gaza ceasefire efforts, reconstruction    CIB finances Giza Pyramids Sound and Light Show redevelopment with EGP 963m loan    Greco-Roman tombs with hieroglyphic inscriptions discovered in Aswan    Egypt reveals heritage e-training portal    Three ancient rock-cut tombs discovered in Aswan    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Egypt's Irrigation Minister urges scientific cooperation to tackle water scarcity    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    Egypt's Democratic Generation Party Evaluates 84 Candidates Ahead of Parliamentary Vote    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Cabinet approves establishment of national medical tourism council to boost healthcare sector    Egypt's PM follows up on Julius Nyerere dam project in Tanzania    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







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



Egypt's outlook stable supported by fiscal policy, despite lower PMI: FocusEconomics
GDP to expand 5.3%, fiscal deficit narrowing to 8.4% in FY 2019, EGP 18.2 per USD in CY 2019
Published in Daily News Egypt on 04 - 04 - 2019

The Egyptian economy's outlook remains stable, despite the shaky start to the third quarter (Q3) of fiscal year (FY) 2019, which ran from January to March, according to the April 2019 edition of the "FocusEconomics Consensus Forecast – Middle East & North Africa", which was released on Tuesday.
The report indicates that after falling in January, the private- sector PMI fell again in February to plunge to the lowest level since September 2017, leaving it in contractionary territory for the sixth month running.
It resulted from markedly lower output and a substantial drop in new business orders. This comes after economic growth accelerated in Q2 of FY 2019. On the fiscal front, the government approved the FY 2020 budget on 27 March.
Commenting on the outlook of firms, Daniel Richards, MENA economist at Emirates NBD, said: "Although conditions are currently difficult, over 44% of respondents expect output to be higher in 12 months' time, sharing our expectation that economic conditions will become steadily more favourable over 2019. The interest rate cut enacted by the Central Bank of Egypt on 14 February – the first since March last year – should help stimulate some private sector demand, which has lagged public investment in driving Egypt's growth recovery over the past two years."
However, FocusEconomics believes that the finance package is in line with the government's IMF-backed reform programme, targeting a lower fiscal deficit on the back of a restrained rise in spending and strong economic growth boosting revenues, adding that "FocusEconomics Consensus Forecast panellists see the fiscal deficit narrowing to 8.4% in FY 2019 and 7.4% in FY 2020."
Meanwhile, MPs are expected to vote in favour of constitutional changes on 14 April which would extend the president's term, subject to a confirmatory public referendum.
In regards to economic growth, the report indicates that higher government investment spending, rising natural gas production and an improving regulatory environment, are to boost growth. However, despite moderating in recent years, fiscal imbalances continue to restrain economic potential.
FocusEconomics' panellists expect the GDP to expand to 5.3% in FY 2019, which is unchanged from last month's forecast, and 5.4% in FY 2020.
On the monetary front, the report says that inflation accelerated to 14.4% in February from 12.7% in January and therefore climbed further above the CBE's Q4 calendar year (CY) 2020 target range of 9.0% plus or minus three percentage points.
"February's increase was due to surging transport prices. Our panellists expect inflation to average 12.0% in CY 2019, which is down 0.1 percentage points from last month's forecast, and 10.2% in CY 2020," the report adds.
At its 28 March monetary policy meeting, the CBE left all interest rates unchanged, leaving the overnight deposit rate at 15.75%, the overnight lending rate at 16.75%, and the main operation rate at 16.25%.
FocusEconomics believes that the CBE's March policy decision came on the back of an uptick in inflation in February and possible sustained price pressures in the run-up to Ramadan in May.
The report forecast that, overnight deposit rate to end CY 2019 at 14.93%, and CY 2020 at 13.46% during the next meeting set for 23 May.
While the CBE has allowed the value of the pound to be determined by market forces since November 2016, authorities continue to ensure stability in the exchange rate against the USD.
On 29 March, the pound traded at EGP 17.33 per USD, a 1.0% appreciation from the same day a month earlier.
"Our panel expects the pound to weaken going forward on the back of expected monetary policy loosening, ending CY 2019 at EGP 18.2 per USD and CY 2020 at EGP 18.59 per USD," the report adds.


Clic here to read the story from its source.