After the slow economic movement of last year the HSBC stated that this year unpredictable markets will turn into long term opportunities for Egypt. They also predicted a positive outlook towards emerging markets despite the Arab uprisings and the European crisis. The head of HSBC Global Banking and Markets, Yaser Gamali said that the principles of the Egyptian market are basically strong with diverse markets, an advantageous location and a promising demographic profile. Also with the help of funding from the IMF (The International Monetary Fund) and some various aid pledges Egypt should be able to lower the governments fiscal deficit by 11% and maintain the budget of LE 134 billion by the end of June 2012 after some severe changes have been made.
Also Egypt plans to increase the prices of gas and electricity in the heavy industry sectors by 33% that will help towards capping the deficit. Further financing could also help towards supporting the Egyptian pound but on the other hand the tourism area and economy could benefit from a weaker currency. All in all the plans look potentially positive and investment looks hopeful in the long term. With emerging markets developing on a wider scale, and added inflation, property and commodity assets will be most favored. With the emerging global markets staying steady it is expected that more money will be spent on infrastructure that will ultimately lead to high levels of domestic consumption and personal wealth among the Egyptian people.
Gamali stated that as Egypt’s political situation becomes more stable Egypt will be one of the nations expected to achieve high levels of domestic consumption. Hopefully Egypt may soon start new negotiations for a new IMF facility that had to be refused at the end of the financial year in June 2011. The recovery and stability of Egypt’s economic future is overall looking and feeling positive and a turbulent 2011 can finally be put in the past.