Egypt Economy to Witness Significant ImprovementSource: www.export-egypt.com 1/21/2015, Location: Africa |
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Oxford Business Group, a global consultancy producing annual economic reports, expressed hope toward signs that heralded a significant improvement of the Egyptian economy in 2015.
The firm's recent report mentioned that investors' confidence in the Egyptian economy was growing. Among the signs of recovery stated in the report was Egypt's posted growth of 2.2 percent for the fiscal year ending June 2014. The IMF and the government forecasting 3.8 percent growth in the current fiscal year has also helped to restore the confidence of investors, according to the report. "The outlook has helped sustain the stock market with share prices rallying 32 percent during the year, making the Egyptian Exchange (EGX) the top Arab stock market in 2014, albeit from a low base," it added. Moody’s rank to Egypt's economy recovering from negative to stable was a welcomed sign. Paying debts owed to international oil companies, BP's announcement to investments equal to US$12 billion over the next five years and doubling its gas supplies to the domestic market in the next decade, the relatively political stability following the presidential elections, slowing inflationary pressures, crucial fiscal reforms and rallies on both the EGX and in the tourism sector helped to restore confidence in the Egyptian economy, according to the report. The report praised the reduction in energy subsidies describing them as the "Achilles' heel of the economy that has been driving up government deficit and debt." Suez Canal project is expected to contribute to the growth of economy, reduce unemployment rates, and increase the canal revenues to more than double, beside other projects in technology, infrastructure, commerce, tourism and agriculture, that are expected to improve Egypt's situation as an industrial and logistics centre. The report expected Egypt to attract further investments in the economic summit planned for March 2015. The report praised the Minister of Tourism Hisham Zaazou's efforts on reviving tourism and expected the sector to return to the pre-revolution levels by April 2015. Between July and September, tourism revenues surged 112 percent year-on-year (y-o-y) to $2 billion, while October data showed this upward trend continuing with a 79.5 percent y-o-y increase in tourist arrivals according to official data. Projections for 2014 put tourism revenues at $7 billion, catering to 10 million tourists. "Despite challenges on the horizon, such as energy shortages, red tape and a lack of visibility over economic plans tabled by the government, political risks appear to be diminishing," the report read. Gulf aid has also contributed to restoring confidence in economy through planned projects using those aid, according to the report. |
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