HSBC is “fundamentally” optimistic on Egypt’s near-term outlook, the international banking group’s chief economist for Central and Eastern Europe, Middle East and Africa Simon Williams said at an HSBC Economist Roadshow event in Cairo this week.
Williams called the gains from Egypt’s economic reform programme “impressive,” adding that his bank believes they have momentum. Williams said, “We remain fundamentally optimistic on Egypt’s near-term outlook.”
“The gains delivered by the IMF-anchored reform process that began in late 2016 are impressive and have momentum, and will, in our view, see the domestic and external imbalances that had become so damaging to economic function continue to narrow over the remainder of this year and into 2019.” Williams continued, “We are optimistic that as inflation falls and confidence in the new, more stable economic environment gains, growth will trend upward boosted by an increase in consumption, investment and exports.
“We expect the recovery process to benefit from the tailwinds of a steady, but extended, monetary easing cycle and strong global risk appetite which should ensure Egypt continues to benefit from capital inflows. The higher rate of growth will not only boost real incomes and enhance support for the reform process underway, but also help drive down nominal imbalances as a proportion of national income.”
The bank’s assessment is an endorsement of President al-Sisi’s economic policies, and marks a turning point in the country’s recent fortunes, as unrest and poor economic performance have marred Egypt’s standing in the world since the uprisings in 2011, and the overthrow of then-president Mubarak.
Jacques-Emmanuel Blanchet, HSBC group general manager, deputy chairman and CEO of HSBC Bank Egypt, said, “We are pleased to be able to provide our clients in Egypt with this important economic update on the country and wider region. HSBC has been operating in Egypt for almost 36 years and we are committed to its future – helping businesses achieve their ambitions.”
The Economist Roadshow is an annual event, organised by HSBC, which sees the HSBC economists travel around the Middle East, North Africa and Turkey (MENAT), giving an update on their outlook on the region’s economies.