Business Monitor International


Egypt Business Forecast Report

Published 28 May 2014

  • 53 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Egypt Business Forecast Report

Core Views

  • One the whole, 2015 will be a relatively positive year for the Egyptian economy, as the currency stabilises and investment returns to the county.

  • The fiscal and net export position will improve significantly on the back of fuel subsidy reform. Subsidy cuts will likely be watered down if public unrest occurs on a significant scale, however, the bulk of reform will remain in place.

  • Hikes to domestic energy prices will push consumer price inflation back into the double digits by the end of the year.

  • Egypt's geopolitical importance will ensure that even if an IMF agreement is delayed for longer than expected, further foreign aid commitments will materialise around the turn of the year. Western powers such as the US and EU have an interest in ensuring the North African country does not experience a more pronounced economic and political crisis. However, it will be donations from the GCC which keeps Egypt afloat this year.

  • We do not expect an IMF deal in 2014, as the economic rationale has waned somewhat since the influx of foreign aid and it is politically unpalatable at present.

Major Forecast Changes

  • Following an influx in foreign aid in 2013 as well as subsidy reform Egypt will be avoid a pronounced balance of payments crisis in 2014 and 2015. That said, as the aid inflows are likely to weaken the government's resolve to push ahead with necessary tax and business environment reforms, we do not expect an IMF agreement to be signed in the near term. Our baseline scenario sees the economy expanding by 3.0% in FY2014/15 and 3.8% in FY2015/16.

Key Risks To Outlook

  • A failure to secure external financing (whether through the IMF or bilateral aid) raises the risks of a disorderly devaluation of the Egyptian pound.

  • Terror attacks, or disturbances caused by the Muslim Brotherhood could have a significant impact on investment and tourism figures.

Economic Activity (Egypt 2009-2018)
Country Indicator 2009 2010

Table of Contents

Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
Sisi To Win Presidential Bid
8
Table: POLITICAL OVERVIEW
8
Long-Term Political Outlook
9
Four Scenarios For The Coming Decade
9
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Ratings
13
Economic Activity
14
Economic Outlook Improving, Slowly
14
Table: GDP By Expenditure
14
Balance Of Payments
16
Current Account To Return To Surplus In 2014
16
table: Current Account
16
Exchange Rate Policy
18
Depreciatory Pressure To Build
18
Monetary Policy
19
Inflation To Ease In 2014
19
table: Monetary Policy
20
Banking Sector
21
Islamic Banking Growth To Slow, But New Markets To Surface
21
Tab le: GCC Islamic Bonds (2014)
21
Chapter 3: 10-Year Forecast
25
The Egyptian Economy To 2023
25
Policy Uncertainty Weighs On Outlook
25
table: Long-Term Macroeconomic Forecasts
25
Chapter 4: Business Environment
27
SWOT Analysis
27
BMI Business Environment Risk Ratings
27
Business Environment Outlook
28
Institutions
28
TABLE: BMI BUSINESS AND OPERATION RISK RATINGS
28
TABLE: BMI LEGAL FRAMEWORK RATING
29
Infrastructure
30
TABLE: LABOUR FORCE QUALITY
30
TABLE: MENA - ANNUAL FDI INFLOWS
31
Market Orientation
32
TABLE: TRADE AND INVESTMENT RATINGS
32
TABLE: Top Expo rt Destinations , 2001-2009 (USDMN)
33
Operational Risk
34
Chapter 5: Key Sectors
35
Defence
35
table: Defence Expenditure 2010-2018
36
Freight Transport
39
tab le: Air Freight - Cai ro Inte rnationa l Airpo rt
40
tab le: Rai l Freight
41
tab le: Maritime Freight
42
Other Key Sectors
43
table: Oil & Gas Sector Key Indicators
43
tab le: Pha rma Secto r Key Indicato rs
43
table: Autos Sector Key Indicators
43
table: Telecoms Sector Key Indicators
44
table: Infrastructure Sector Key Indicators
44
table: Food & Drink Sector Key Indicators
44
Chapter 6: BMI Global Assumptions
45
Global Outlook
45
Growth Increasingly Polarised
45
Table: Global Assumptions
45
Tab le: Developed States , Rea l GDP Growt H, %
46
Tab le: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
46
Tab le: Eme rging Markets , Rea l GDP Growth , %
47

The Egypt Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Egypt and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Egypt's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Egypt's economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Egypt's country risks against regional peers using BMI's country comparative Risk Rankings system.
  • Evaluate external threats to doing business in Egypt, including currency volatility, the commodity price boom and protectionist policies.

The Egypt Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Egypt economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for Egypt through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Egypt Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Rankings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Egypt and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Egypt, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Egypt over the next 5-years?

BMI's Egypt country Risk Rankings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Egypt Market - Political Strengths, Weaknesses, Opportunities and Threats facing Egypt.
  • Political Stability and Risk Assessment - BMI's Risk Rankings assess explicit short- and long-term risks to political stability; latest ankings, rankings and trends for Egypt's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark Egypt's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Rankings with SWOT Analysis - Business Environment Risk Rankings for Egypt, benchmarked against rankings for regional neighbours.

Country Competitiveness - Competitiveness of Egypt's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Rankings.

Key Sector Outlook

Which industry sectors in Egypt will grow fastest, and where are the major investment opportunities in the market?

BMI's identifies investment opportunities in Egypt's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry with developments over 2008-2012, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2013-2017, using BMI's proprietary industry modeling technique, which incorporates all key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across, and within, each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express