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We have a compact read for you today, with news that the World Bank held Egypt’s growth outlook steady over the next two years, updates on our latest FDI figures, and more.
World Bank maintains Egypt’s real GDP forecast through 2026
The clap:
In line with its April projections, the World Bank Group (WBG) is forecasting Egypt’s real GDP growth will hold steady at 2.8% in fiscal year (FY) 2023-2024, and expects an expansion to 4.2% for FY 2024-2025, and one at a 4.6% clip for the following year, according to the Global Economic Prospects report.
In context:
Egypt’s growth outlook is higher than the global average projection for 2024, which WBG expects will be maintained at 2.6% in 2024, before seeing an 0.1% uptick in both 2025 and 2026.
The catalyst :
The bank attributed the rebound in real GDP growth in FY 2024/2025 and FY 2025/2026 to the USD 35 billion Ras El-Hekma that was signed in February with the UAE.
What else?
According to the report, Egypt’s private consumption is anticipated to increase as a result of a rise in remittances — which is expected to jump 10% annually through 2030 — and an anticipated drop in inflation next year.
An exports hike following EGP devaluation?
WBG also highlighted that the exchange rate decline following the devaluation of our currency in March is expected to support net exports and promote economic growth.
AND- The AFDB’s inflation projections are also in:
Inflation rates in Egypt will decline by about 13 percentage points in 2025, reaching 23% compared to 36% in 2024, according to the African Development Bank’s Economic Prospects report.
Egypt sees a 12.3% YoY rise in FDI this fiscal year
The Clap:
Egypt recorded the fastest pace of growth in its foreign direct investment (FDI) inflows in FY 2024, recording a 12.3% YoY leap to USD 10.04 billion, according to Hossam Heiba, CEO of the General Authority for Investment and Freezones.
Growth drivers:
Heiba attributes the surge in international investment to Egypt’s efforts to position itself as a regional hub for green energy, technology, communications, agriculture, industry and logistics, health care, and tourism.
Remember:
Swiss investment bank UBS says if Egypt can secure a 30% increase in FDIs and investment portfolio flows along with a return of remittances to the levels of the fiscal years 2021–2022, then the country could secure USD 19– 20 billion in net cumulative cash flow by June 2025.
In other news:
Mainly off the confidence spurred by the wrap of the Ras El Hekma agreement, foreign investors bought up USD 15 billion worth of local bonds this year, the Financial Times wrote.
Where we stand:
Post- EGP devaluation, foreign purchases of local debt in March increased by USD 23.7 billion month-on-month, bringing up the total to EGP 1.54 trillion, Asharq Business wrote, citing CBE figures. International financiers currently hold approximately a tenth of our local debts, FT noted.
The clap:
After receiving regulatory approval, Al Ahly Financial Investments Management has set tomorrow as the launch date for its new gold fund, Head of Business Development Hanan Wagdy said in an interview with Al Borsa Newspaper.
The specifics:
The fund will issue 100,000 investment certificates priced at EGP 100 apiece.
Remember:
Egypt’s first gold fund by Asset managers Evolve Investment Holding and Azimut was 15x oversubscribed when it launched in 2023, raising EGP 152.8 million from initial orders. The country’s FX crisis at the time and worsening inflation led locals to pour savings into gold instead, with prices for the precious metal soaring 97% locally in 2023.
In other fund news:
CI Capital Asset Management — which announced plans to kickoff Egypt’s first shariah adherent investment funds following the kick off of the EGX33 index — will move forward with the launch in 3Q 2024, company CEO Amr Abol Enein told CNBC in an interview. CI says it wants it to be among Egypt’s top five funds, and plans to secure the majority of its capital from Gulf countries.
And more to come:
Likewise, Azimut, which is eyeing a similar launch, submitted last week an application with the Financial Regulatory Authority to launch its new Islamic fund in the EGX33, Azimut Managing Director Ahmed Abou El Saad told Al Borsa Newspaper.
What else is clapping?
Government-controlled Egyptian Chemical Industries (Kima) recorded a 91% YoY fall in net profits to EGP 102.2 million for the nine months ending in March. Its revenues are also down 10% YoY to EGP 4.61 billion during the period.
The government received approval to float a consultancy services tender to select an international advisor tasked with devising a national strategy to localize the manufacturing of chips and solar energy panels.
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