Amr Kamal, chairperson of the board of directors of the Egyptian Arab Land Bank, said that 2018 is the year of transition from the economic crises experienced by Egypt in recent years, but it will not be a year of prosperity, as some expect.
Kamal added that the state still imports most of its production components, along with many goods, which may not change much during 2018.
Here is the transcript of the interview:
What are your expectations for the targeted growth rate during 2018?
I think the growth rate will revolve around 5%. This depends on productivity and the state of the various commodities. The state continues to import most of the production components of production, along with manya lot of goods, which may not change much during 2018.
What are the most important sectors that can contribute strongly to this growth?
I believe that real estate development is one of the most important sectors that will lead economic activity during the current year, because of the associated industries and other economic activities. The oil sector can play a big role in driving growth, after the entry of Zohr field into production.
What are your expectations for public debt and the budget deficit in 2018?
I would like to emphasise that the issue of borrowing either from the local market or from foreign markets is a normal process carried out by all countries of the world, even countries with major economies.
However, this year is expected to witness a relative calm in the process of borrowing. This depends mainly on how the country has developed a comprehensive development plan, as this is the real challenge to the government, not the borrowing process.
What are your expectations for the value of the pound against the dollar in the new year, and the reasons for that?
As long as our foreign exchange resources barely cover our expenses, the price of the pound against the dollar will continue to fluctuate slightly above its current level of about EGP 17.6. Therefore, we need to make more efforts to create industries that produce commodities that replace the goods we import, develop export industries, and develop other foreign exchange resources, so as to increase our foreign exchange resources and reduce expenditures.
What are your expectations for inflation and interest rate trends?
I expect inflation to fall during the fourth quarter of 2018 to about 16%.
As for interest rates, the new year will see the Central Bank of Egypt’s (CBE) tendency to reduce them by rates ranging from 2 to 3%.
What is your view of the future of foreign exchange reserves and the CBE’s ability to meet external commitments?
I expect foreign exchange reserves at the CBE to reach $45bn at the end of 2018, on the back of increased resources, especially from tourism, as Russian tourists flow back to Egypt, next to growing resources from Suez Canal revenues, along with exports.
What is the role of banks in supporting investors and increasing lending in the new year?
Banks must be strongly involved in the process of economic development and support of national projects, a role already played by banks and we need to increase it further in the coming period.
What are the most important sectors that banks will focus on in the new year?
I believe that banks should support the state plan to increase the volume of domestic and foreign investments by supporting investors, standing by them, and focusing more on exporting industries, which produce goods that can replace imported ones. They should also continue supporting small and medium enterprises and the real estate sector.
