{"id":15752,"date":"2016-07-13T08:59:42","date_gmt":"2016-07-13T07:59:42","guid":{"rendered":"http:\/\/cedej.fr\/?p=15752"},"modified":"2016-07-13T09:09:46","modified_gmt":"2016-07-13T08:09:46","slug":"15752","status":"publish","type":"post","link":"https:\/\/cedej-old.hybrid-cs.com\/index.php\/2016\/07\/13\/15752\/","title":{"rendered":"The Media Round-Up on Egyptian Economy – May\/June 2016"},"content":{"rendered":"

Stock market and finance<\/h4>\n

Pound remains stable in central bank auctions but continues decline on parallel market<\/i>\u00a0<\/strong><\/h5>\n

After a major devaluation of the Egyptian pound in March<\/a>, the currency remained stable at 8.78 to the dollar at central bank auctions but continued its drop on the parallel market. Indeed, in spite of latest\u00a0initiatives by the Egyptian Central Bank<\/a>\u00a0to constrict black market currency trading,\u00a0the pound continued its decline and reached a record low of EGP 11.08 to US$1<\/a>\u00a0on the black market in June.<\/p>\n

The\u00a0foreign currency shortage and low value of the Egyptian pound negatively affected non-oil business activity<\/a>, which continued to decline in May, as companies are struggling to proceed to vital raw material imports to uphold their production.<\/p>\n

Rating agency downgrades Egypt<\/i>\u00a0<\/strong><\/h5>\n

The rating agency\u00a0Standard and Poors downgraded Egypt\u2019s perspective on long-term sovereign credit<\/a>from stable to negative in May. Indeed, because of its decreasing revenues from tourism and exports and the resulting foreign currency crisis, the agency projects that Egypt would be exposed to increasing\u00a0\u201cexternal and fiscal vulnerabilities\u201d<\/a>\u00a0throughout the coming fiscal year. Rating agencies have repeatedly described Egypt\u2019s unstable sociopolitical environment as an obstacle for a consolidation of foreign currency business sectors.<\/p>\n

Egypt Air flight vanishes, causing panic on the stock market<\/i>\u00a0<\/strong><\/h5>\n

After the vanishing of an EgyptAir flight on its way from Paris to Cairo on May 19th,\u00a0panic erupted on Egypt\u2019s stock market<\/a>, resulting in a 1.8 percent drop of the benchmark index EGX30. Investors anticipated the possibility of the incident being a terrorist attack and reacted to its potentially negative effects on the economy by selling their assets.\u00a0
A terrorist attack on a Russian plane in October 2015 resulted in a 47 percent decline of tourism, a vital source of foreign currency for Egypt.<\/p>\n

Foreign reserves on the rise<\/i>\u00a0<\/strong><\/h5>\n

Egypt\u2019s foreign reserves increased to US$ 17.52 billion<\/a>\u00a0at the end of May, compared to US$ 17.011 billion in April, according to a statement of the Egyptian Central Bank.<\/p>\n

Core inflation increases<\/i>\u00a0<\/strong><\/h5>\n

Urban consumer price inflation surges,<\/a>\u00a0reaching 12.3 percent in May, up from 10.3 percent in April. The Egyptian Central Bank reacted to the rise of inflation by\u00a0lifting interest rates by 100 basis points in June<\/a>.<\/p>\n

\u201cBrexit\u201d hits Egyptian stock market<\/i>\u00a0<\/strong><\/h5>\n

Global financial markets showed strong reactions after Great Britain voted to leave the European Union<\/a>, leading several central banks to intervene. The British pound lost 10 percent in value against the US-dollar and reached a record low of US$ 1.32.\u00a0
Egypt has close trade relations to the United Kingdom, therefore the\u00a0Egyptian benchmark index EGX30 experienced a 5.54 percent decline<\/a>\u00a0three days after the referendum, on June 26th.<\/p>\n

Investment<\/h4>\n
\u201cEl-Wadi El-Gadid\u201d agricultural project<\/i>\u00a0<\/strong><\/h5>\n

On May 5th, Egypt\u2019s head of state Abdel-Fattah El-Sisi attended the\u00a0celebration of the first harvest of a nationwide project of reclaiming farmland<\/a>. The initiative, aiming to reclaim over 10 000 acres of farmland, comes within the context of a series of infrastructure projects, launched by the Egyptian government in an effort to increase food security and independence.<\/p>\n

British Petroleum approved exploitation of Egyptian gas field<\/i>\u00a0<\/strong><\/h5>\n

The British oil company\u00a0BP approved its investment in the exploitation of the Atoll gas field<\/a>\u00a0offshore to Egypt, 15 months after its discovery, saying it would deliver first gas by 2018.<\/p>\n

Construction of the new metro line resumes<\/i>\u00a0<\/strong><\/h5>\n

The Egyptian government signed contracts for an amount of EGP 6 billion with Arab Contractors Company and Orascom Construction to\u00a0resume the construction of a third Cairo Metro line<\/a>, expected to be completed by 2020.<\/p>\n

Exterior trade<\/h4>\n
Trade deficit declines<\/i>\u00a0<\/strong><\/h5>\n

Due to a drop in imports and a slight rise of the oil price,\u00a0Egypt\u2019s trade deficit declined by 27.2 percent in March<\/a>, now amounting to EGP 19.9 billion, compared to EGP 35.7 billion a year prior. In fact, the\u00a0Egyptian Central Bank aims to reduce imports by US$ 20 billion<\/a>\u00a0to reach a total volume of US$ 60 billion in 2016.<\/p>\n

Egypt to receive Russian loan for nuclear power plant construction<\/i>\u00a0<\/strong><\/h5>\n

On May 19th, Egyptian president Abdel-Fattah El-Sisi approved a US$ 25 billion loan from Russia for the construction of the country\u2019s first nuclear power plant. The loan will finance 85 percent of the nuclear project, expected to be completed by 2022.<\/p>\n

Egyptian-German trade cooperation<\/i>\u00a0<\/strong><\/h5>\n

Germany and Egypt signed agreements worth \u20ac 153 million<\/a>\u00a0(approx. US$ 168 million), during a visit of the Egyptian Minister of International Cooperation, Sahar Nasr, to Germany. The agreements include investments in the sector of renewable energy and civil society projects.<\/p>\n

Hungarian Prime Minister visited Egypt<\/i>\u00a0<\/strong><\/h5>\n

On the 1st of June, in the context of the visit of Hungarian Prime Minister Viktor Orban in Egypt, both countries signed an agreement concerning the financing of a major infrastructure investment. Indeed,\u00a0Egypt will purchase train carriages, worth approx. US$ 1 billion from Hungary<\/a>, who will finance the deal.<\/p>\n

Suez Canal<\/h4>\n
Revenues continue to decline<\/i>\u00a0<\/strong><\/h5>\n

Despite the inauguration of an additional shipping lane last August,\u00a0revenues from the Suez Canal declined for the third consecutive month in March<\/a>. In fact, according to Ahram Online, revenues in dollars showed a 1.2 percent drop compared to the US$ 401.4 million in revenues in February. Low oil prices and the international economic slowdown are believed to be the main causes for the downturn of revenues of the Suez Canal.<\/p>\n

Tourism<\/h4>\n
The number of tourists further dropped in April<\/i>\u00a0<\/strong><\/h5>\n

The\u00a0number of tourists that visited Egypt in April dropped by 54 percent<\/a>, compared to the prior year. In fact, in the first quarter of 2016,\u00a0Egypt gained US$500 million in tourism revenue, a huge drop compared to US$ 1.5 billion at the same period in 2015<\/a>. The crash of an EgyptAir flight in May is likely to further decrease the number of visitors.<\/p>\n

Franz Paul Helms<\/i><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Stock market and finance Pound remains stable in central bank auctions but continues decline on parallel market\u00a0 After a major devaluation of the Egyptian pound in March, the currency remained stable at 8.78 to the dollar at central bank auctions but continued its drop on the parallel market. Indeed, in spite of latest\u00a0initiatives by the…<\/p>\n","protected":false},"author":3,"featured_media":15124,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[56,59],"tags":[],"_links":{"self":[{"href":"https:\/\/cedej-old.hybrid-cs.com\/index.php\/wp-json\/wp\/v2\/posts\/15752"}],"collection":[{"href":"https:\/\/cedej-old.hybrid-cs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cedej-old.hybrid-cs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cedej-old.hybrid-cs.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/cedej-old.hybrid-cs.com\/index.php\/wp-json\/wp\/v2\/comments?post=15752"}],"version-history":[{"count":4,"href":"https:\/\/cedej-old.hybrid-cs.com\/index.php\/wp-json\/wp\/v2\/posts\/15752\/revisions"}],"predecessor-version":[{"id":15756,"href":"https:\/\/cedej-old.hybrid-cs.com\/index.php\/wp-json\/wp\/v2\/posts\/15752\/revisions\/15756"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cedej-old.hybrid-cs.com\/index.php\/wp-json\/wp\/v2\/media\/15124"}],"wp:attachment":[{"href":"https:\/\/cedej-old.hybrid-cs.com\/index.php\/wp-json\/wp\/v2\/media?parent=15752"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cedej-old.hybrid-cs.com\/index.php\/wp-json\/wp\/v2\/categories?post=15752"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cedej-old.hybrid-cs.com\/index.php\/wp-json\/wp\/v2\/tags?post=15752"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}