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Business Monitor International sees real estate and telecommunications as key growth engines - 03 July 2007
03-07-2007 - EGYPT
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Country from : Egypt
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According to Business Monitor International:
"We have left our real GDP growth forecasts unchanged, on the back of what appears to be another strong performance in Q2 (October to December). According to our estimations (arrived at by calculating the difference between H1 data released by the central bank in March and Q1 data released earlier this year), real GDP grew by 6.5% y-o-y in Q206/07. Although this is a slight slowdown on the 7.1% y-o-y rate recorded in Q1 of the financial year, we stand by our end-year forecast of 6.7%, as we expect continued strong investment and consumption to propel growth. All sectors expanded in real terms, with the poorest performance being the 0.96% growth in the mining sector. Given a high base and diminishing energy reserves, this is to be expected and no cause for concern, particularly since Egypt continues to diversify its economic base.
Construction continues to grow very strongly, expanding by 14.5% y-o-y in real terms in Q2 of the financial year, according to our estimates, although interestingly, real estate has not followed, growing by around 3% over the last three quarters. This signals great potential: although Egypt's home finance market is underdeveloped at the moment, financial reforms (including the creation of a credit bureau) are taking place. The bureau, now called iScore, will combine the records of all of Egypt's major lenders, making it easier for lenders to assess a borrower's creditworthiness. This in turn will aid the development of small business start-ups and mortgage finance, and, ultimately, bring down borrowing rates. Certainly, there is considerable room for improvement in this field: Egypt scores just 21.1 in the 'getting credit' subsection of our business environment ratings. In conjunction with the explosion in construction, and the wealth effect of general economic growth and strong consumption, this should mean that real estates is a good growth area gong forward."
For further information: Business Monitor International |
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