{"id":610566,"date":"2023-11-22T00:00:00","date_gmt":"2023-11-22T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/11\/22\/egypt-economic-growth-to-accelerate-this-fiscal-year-as-privatization-boosts-investment-bmi\/"},"modified":"2023-11-22T00:00:00","modified_gmt":"2023-11-22T00:00:00","slug":"egypt-economic-growth-to-accelerate-this-fiscal-year-as-privatization-boosts-investment-bmi","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/11\/22\/egypt-economic-growth-to-accelerate-this-fiscal-year-as-privatization-boosts-investment-bmi\/","title":{"rendered":"Egypt economic growth to accelerate this fiscal year as privatization boosts investment -BMI"},"content":{"rendered":"

State asset sales to underpin stronger economic growth this year -BMI:<\/strong> The Egyptian economy will see improved growth this fiscal year on the back of the government\u2019s privatization program<\/a>, though the war in Gaza will add to the headwinds bearing down on the economy, according to BMI, a research unit of Fitch Solutions. Economic growth will accelerate to 4.2% this year from 3.8% in FY 2022-2023 as progress on asset sales draws new FDI that will \u201cmore than offset\u201d the impact of falling demand and limited ability to cut imports, it wrote in a recent report.<\/p>\n

Remember:<\/strong> The government rebooted its privatization program earlier this year, selling stakes in Telecom Egypt<\/a>, Al Ezz Dekheila<\/a>, Elab, Ethydco, and EDC<\/a>, and Eastern Company<\/a>. Next in line<\/strong> are stakes in its hotels holding company<\/a> and the military-owned fuel retailer Wataniya<\/a>.<\/p>\n

Slower than expected:<\/strong> BMI\u2019s latest outlook is a slight downgrade from its previous 4.4% forecast following the outbreak of war in Gaza, which it says will drag on investment, consumption, and exports. The war will add \u201canother layer of uncertainty\u201d and encourage businesses to adopt \u201ca \u2018wait-and-see\u2019 approach\u201d towards investment, the report says. It has also created \u201csignificant risks\u201d for the tourism sector, and forced the government to curb import-intensive projects.<\/p>\n

BMI aligns with the government\u2019s forecast: <\/strong>The government this month raised<\/a> its growth target for the current fiscal year to 4.2%.<\/p>\n

It\u2019s not the first int\u2019l institution to downgrade its Egypt growth outlook in recent weeks: <\/strong>Both the IMF<\/a> and World Bank<\/a> cut their growth forecasts last month on the back of the ongoing FX crisis and the government\u2019s rising borrowing costs<\/a>. The lenders are now expecting the Egyptian economy to grow 3.6% and 3.7% respectively during the current fiscal year.<\/p>\n

Downside risks:<\/strong> The war could take a heavier toll on the economy if it spills into other countries in the region, to which BMI assigns a 40% probability. \u201cThis would result in a more pronounced slowdown in investment activity, reduce travel and tourism receipts, lead to a more prolonged disruption to gas exports, increase oil prices, and lead to a higher import bill,\u201d the report says.<\/p>\n

More from BMI:<\/strong><\/p>\n