Egypt has revised up its economic growth forecast for fiscal 2017-18 that began in July to 5.3 to 5.5 per cent from 4.8 per cent previously, the planning minister said on Saturday.
Hala Al Saeed said gross domestic product was expected to have grown 5.2 to 5.3 per cent in the second quarter that ended in December, adding that the government was aiming for 6 per cent growth in 2018-19.
Egypt's economy has struggled since a 2011 uprising drove tourists and foreign investors away, two main sources of hard currency, but the government hopes IMF-backed policy changes it has embarked on over the past year will put it back on track.
Egypt is targeting a 20 per cent rise in total investment for 2018-19, up from 646 billion Egyptian pounds (Dh134.34bn) targeted for 2017-18, Ms Al Saeed said.
To draw investment and boost growth, Egypt passed a new investment law last year offering incentives to investors, while a decision to float the pound in late 2016 led to a devaluation that made Egyptian assets relatively cheap in dollar terms.
The news came as Egypt's tourism revenues jumped 123.5 per cent year-on-year to US$7.6bn in 2017, a government official said.
The number of tourists who visited Egypt in that time jumped 54 per cent to 8.3 million, added the official, who preferred to remain anonymous.
The tourism sector is one of the country's main sources of foreign currency but it has struggled since a 2011 uprising that led the then president to step down. The number is still well below the 14.7 million who visited Egypt in 2010 before the uprising.
The revised economic forecast came a day after Egypt reported inflation dropped sharply in December, the latest apparent indication of economic improvement after the 2016 currency float hit Egyptians hard.
Economists say, however, it may just be showing that spending power has yet to recover.
Prices climbed to record highs and the Egyptian pound lost half its value after the central bank floated it in November 2016 in a bid to secure a $12bn IMF loan to boost economic growth after years of turmoil.
With the pound at about 17.7 to the US dollar from a pegged 8.8 before the float, Egyptians have had to amend their spending habits to deal with their incomes and savings being slashed in half.
Urban consumer inflation eased to 21.9 per cent in December from 26 per cent the previous month, its lowest reading since the flotation, official data showed last week.
Core inflation, stripping out volatile items such as food, fell to 19.86 per cent from 25.53 per cent.
Since the float, Egyptian exports have found new markets, narrowing the country's trade deficit, and foreign reserves and foreign direct investment have surged to record highs.
But economists say the inflation drop is the result of a strong base effect, and not necessarily a meaningful economic recovery.
___________
Read more:
Egypt inflation falls sharply as currency devaluation impact eases
How 2018 will shape up for Egypt
Middle East LNG demand forecast to dip as Egypt becomes self sufficient
___________
"After November 2016, you were comparing to the high rates of the post-flotation period, but in December, you had a strong base effect," said the senior economist at Beltone Financial Alia Mamdouh.
Monthly headline inflation contracted for the first time in two years in December due to a decline in the prices of poultry, meat and some vegetables and beans, data showed.
"The reduction may signal that spending level has not fully recovered, especially because seasonal demand usually drives rates up," Ms Mamdouh said.
"We had expected a monthly rate of 0.5 to 0.7, but instead everything was flat except for food prices of which some went down."
Food producers said they wished to raise prices to maintain profitability, but are unable to because the market cannot absorb any more price hikes.
"We would like to raise the prices but the market isn't favourable to that right now," said Hani Berzi, the chairman of Edita Food Industries, one of the country's largest food producers.
Retailers have also had to reduce prices of some foods like poultry and meat to lure back shoppers driven away by hikes.
"People don't buy anymore," said Ismail Gamal, the owner of a poultry shop in Nasr City. "We're afraid we'll go out of business, if we don't reduce prices."
Economists say purchasing power could take three to four years to recover from the shock of the flotation.
"Segments of society have shifted from meat to cheese as a source of protein, this is what inflation did to consumers," said Noaman Khalid, a CI Capital Asset Management economist.
He said a complete economic cycle that includes business recovery and increased wages is necessary before purchasing power returns to pre-float levels and a healthy inflation rate is seen.
Egypt's central bank has raised key interest rates by 700 basis points since it floated the pound to battle soaring inflation. Economists expect it to start cutting the rates in their upcoming monetary policy meeting, set for February 15.
Abdul Jabar Qahraman was meeting supporters in his campaign office in the southern Afghan province of Helmand when a bomb hidden under a sofa exploded on Wednesday.
The blast in the provincial capital Lashkar Gah killed the Afghan election candidate and at least another three people, Interior Minister Wais Ahmad Barmak told reporters. Another three were wounded, while three suspects were detained, he said.
The Taliban – which controls much of Helmand and has vowed to disrupt the October 20 parliamentary elections – claimed responsibility for the attack.
Mr Qahraman was at least the 10th candidate killed so far during the campaign season, and the second from Lashkar Gah this month. Another candidate, Saleh Mohammad Asikzai, was among eight people killed in a suicide attack last week. Most of the slain candidates were murdered in targeted assassinations, including Avtar Singh Khalsa, the first Afghan Sikh to run for the lower house of the parliament.
The same week the Taliban warned candidates to withdraw from the elections. On Wednesday the group issued fresh warnings, calling on educational workers to stop schools from being used as polling centres.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
North Pole stats
Distance covered: 160km
Temperature: -40°C
Weight of equipment: 45kg
Altitude (metres above sea level): 0
Terrain: Ice rock
South Pole stats
Distance covered: 130km
Temperature: -50°C
Weight of equipment: 50kg
Altitude (metres above sea level): 3,300
Terrain: Flat ice
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
