Egypt great economic reform story in eyes of market: Morgan Stanley

We're optimistic for Egypt, which now focuses on measures to increase private sector competitiveness, says head of Emerging Markets at Morgan Stanley

Due to recent economic reforms that followed the deal with IMF in 2016, Egypt became a great economic reform story in the eyes of the market, according to Ruchir Sharma head of Emerging Markets and Chief Global Strategist at Morgan Stanley.
“Egypt's longer term aim is to become a low-cost manufacturing hub, a task that will be difficult in the age of deglobalisation. Still, the cheap currency and the large domestic market have drawn foreign direct investment from regional players like a Turkish food company that is investing $200m to expand its biscuit plant, and strong interest from well known Western firms. Big US tech firms are expanding in Egypt, and some are said to be in talks about opening data warehouses. Nonetheless, three CEOs volunteered independently that foreigners were not likely to invest more heavily until private Egyptian companies do, and that has yet to happen in a big way,” Sharma elaborated.
He added, “We're optimistic for Egypt, which is now moving past fiscal reform to focus on measures to increase private sector competitiveness, including tax cuts for small and medium-sized enterprises and land reforms. We'll be watching progress closely, knowing investors will flee at the first sign that President Abdel Fattah Al-Sisi's reform discipline is faltering. On balance, however, we think Egypt is on track to become a breakout nation.”
Moreover, a recent report from Oxford Economics forecasted that Egypt Consumer Price Index (CPI) inflation will reach 10.2% in the fiscal year (FY) 2019/20 that has registered 11% in FY 2018/19. As well as, the report projected that the CPI will decrease to reach 9.7% in FY 2020/21.
Additionally, the report forecasted that the real GDP growth will record 5.7% in FY 2019/20 compared to 5.6% in FY 2018/19, predicting that it will decrease to reach 5.5% in FY 2020/21.
The report said that the Egyptian export of goods reached $29.3bn in FY 2018/19 and expected to reach $32.1bn in FY 2019/20 and predicted an increase in exports to reach $35.3bn in FY 2020/21.
Meanwhile, Egypt's imports of goods projected to reach $64.9bn in FY 2019/20 compared to $60.8bn in FY 2018/19. Moreover, the report expected that the imports will increase to reach $69.3bn in FY 2020/21.
For the current account balance, the Oxford Economics anticipated that it will decrease to reach 2.3% of GDP in FY 2019/20 compared to 2.5% of GDP in FY 2018/19 and projected to continue to decrease to register 2.2% in FY 2020/21.
The exchange rate per USD is expected to register EGP 17.6 in 2020 and to be vaulted to reach EGP 19.5 in 2021, the report anticipated.
Furthermore, the report estimated that the external debt to reach $123.6bn in FY 2019/20 compared to $111.5bn in FY 2018/19 and projected to continue increasing to register $134.1bn in FY 2020/21.