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Industry players + market watchers on what’s coming down the pipeline:Yesterday’s package of measures will start to have (positive) knock-on effects, experts said overnight, with some of these already starting to take shape.
#1- Inflation to cool: Commodity prices are expected to fall, Federation of Chambers of Commerce Secretary-General Alaa Ezz said, with some prices — such as the price of cooking oil — already starting to decline. The end of the FX shortage should also increase the supply of goods, leading to competition that will help drive prices down, Ezz added.
#2- More FDI: Expect foreign investments to pour in over the next few months, as many investors — including those within the state privatization program — had been holding off inking any binding agreements before the float of the EGP, Ezz added.
#3- Fuel prices to increase: The government’s fuel pricing committee could meet today after a two-month hiatus and raise fuel prices by more than 10%, Cairo Capital Securities Chief Economist Hany Genena told Al Arabiya (watch, runtime: 4:21).
#4- Remittance recovery? Remittances were down 30% y-o-y in 2023 asEgyptians abroadheld onto their money or sent it back through parallel mechanisms. The government said it wants to raise remittances — one of Egypt’s biggest sources of FX — from Egyptian expats by 10% each year to reach USD 53 bn by 2030.
#5- When can we expect the MPC to meet next? The central bank’s Monetary Policy Committee is scheduled to meet on Thursday, 28 March. It so far remains unclear whether yesterday’s extraordinary meeting could mean a change of plans.
#6- A new cabinet lineup? “Investors and the business community will be looking to see who sits on the cabinet economic team when we see a new government formed [after the start of President Abdel Fattah El Sisi’s next term in office]. Policy stability will be key. It’s not just about the monetary piece of the puzzle,” our friend Mohamed Abu Basha, managing director and head of macroeconomic analysis at EFG Hermes, told us yesterday.
