Geopolitical headwinds? Sure. But the picture ahead for Egypt is positive, HSBC’s CEEMEA top economist Simon Williams and global geopolitical risk chief Dr. Helen Belopolsky argued in a client briefing (pdf) at HSBC Egypt’s head office in Cairo last week.

Working in Egypt’s favor are political stability and a region increasingly awash with economic potential. Together, they’re putting Egypt in a position in which businesses can take advantage of a rapidly changing global and regional economy.

(Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

Our long road to rebalance and reset the economy is also showing early results, as “inflation is stabilizing, the currency is holding, the budget deficit is easing, and interest rates are starting to fall,” Williams said. This is opening up new possibilities for investors to take advantage of as liquidity improves and global trade looks for new routes, said the lender’s Egypt CEO Todd Wilcox.

And these new openings can in turn help the country overcome ongoing economic challenges, with Wilcox pointing out how the uptick in investor appetite for using Egypt as a manufacturing hub will support our export ambitions and lower FX risk.

We’re still not out of the woods yet, with Williams pointing to the very real threat posed by ongoing geopolitical risks with no predictable conclusion, energy production and supply concerns, and a fall in Suez Canal revenues — down some 60% y-o-y in 2024 to USD 7 bn. Keeping up the country’s commitment to fiscal discipline will be key to weathering future storms, explained Williams.

But volatility isn’t necessarily a bad thing for business, especially with Egypt midway through its reform agenda, said Belopolsky. Businesses can take advantage of a changing geopolitical climate, but only if they adapt and evolve to work with and not against the new and more volatile economic normal.

Tags: