Egypt on Course

The near-term outlook for Egypt is positive. There has been a turnaround in Egypt’s external vulnerabilities, with strengthening foreign exchange reserves accumulation, stated Deutsche Bank Markets Research in a recent special report, Yahoo reported. The report noted that FX reserves grew to $28.6 billion in April, adding that the Egyptian pound has seen a 0.39% quarter-to-date gain. The DB pointed out that, in parallel to this quarter-to-date gain, Egypt’s GDP growth is likely to have reached 3.9% in the first quarter of 2017, and the International Monetary Fund estimates that the primary fiscal deficit has fallen by 2%, from 4% in 2015/2016 (overall deficit stood at 12% in 2015/2016, according to the IMF). The ministry of finance has drafted an ambitious budget for 2017/2018 that is now under review by the parliament. The report, which focused on Egypt’s outlook in terms of different indicators, including both the targets achieved and the risks and expectations in the future, noted that risks to the outlook stem from reform fatigue and high inflation.