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00:00That inflation backdrop is key here because we went from, you know, as high as 38% back in 2023 to the latest figures showing 13.9% and July of 2025. So does that open the door up to further easing out of the central bank? And if it does, what are you expecting today? I think so. We're basically looking for a 100 basis point reduction in the rate, which I think largely the market has been expecting that given the posts that you had unexpectedly the last time. So I think the circumstances are right for the central bank to go ahead with the rate cut. You've had falling inflation anyways. You've had better liquidity in the market and fixed liquidity. You've had certain numbers that have come out on the macro side, which are quite promising. So all in all, I think there is some leeway for the central bank to go ahead and resume its reduction in rates and we expect this to continue. We're looking for maybe about rates to come down to 20, 21% by the end of the year. Of course, it's depending on various factors, including what happens on the global level. If you have a better situation with the Fed, the ECB, everyone going as expected. So if the Fed to start resume their own cutting cycle and go for cuts in September, what sort of knock on effects would that have on Egypt? Well, the Egypt is not pegged to the dollar like the U.S., but still there would be benefits for them. You would be looking at better external financing rates. They have a lot of debt to debt servicing. So that would become lower as well. In general, they would be in a much competitive, very competitive basis once the Fed starts cutting rates. So it would work to the benefit of Egypt in a bit. So in the way the Fed Cup would be beneficial for the Egyptian economy because the Egyptian economy has had multiple prongs at play. You've got Central bank, but of course you have the reform process. You've had the flexibility of the currency. But all of that goes hand-in-hand with the fact that Egypt's are actually in an IMF program. They received the bailout in the case of the UAE, some financial assistance or investments. Yes. How is the reform momentum right now? But they are taking it slow. It's a gradual approach. So what you have seen is some beneficial effects in terms of the fiscal reforms, basically on the efficiency of tax collection and so on. So that you're seeing the results as well in the tax revenues hiking up and so on. But there are other parts of the reforms which have been quite slow in terms of the State-owned assets privatization. That's taken its time. It has been very, very slow because you hear these statements saying that it's going to happen next quarter or by the end of the year, but you don't really see them come through at the rate at which you expect. And I think that's one of the drawbacks that you've seen in terms of the IMF expects the reforms to go, but it has not happened in pace with what you see. That is the biggest risk right now to the Egyptian outlook. For now, they seem to be doing well. I mean, we have to consider rate on what was happening in Egypt a few years back from that dismal picture of what we're seeing right now is surging tourism revenue. You're seeing manufacturing at record highs. If you're looking at the latest print that's come out in industrial production, you've had non-oil exports increasing as well. And in general, there seems to be a level of confidence that exists now that wasn't there before. So in that front, I think Egypt is in a much better place. And the review says scheduled to happen again. I think they've combined the next two reviews to happen later this year. And you have the central bank governor staying on to see it through also. Yeah, that's also a positive, positive sign. Okay. Let me broaden it out and ask you about the region as a whole. I can't believe we're already September, obviously September. How has the region weathered the whole uncertainties around global trade tariffs? And of course, this region was somewhat spared from from the higher levels of reciprocal tariffs, but still not immune to a potential global slowdown. I think the region has done quite well. They've taken the right steps in terms of U.S. is a strong partner. If you look at the history and everything that's been happening. But they're also keen to open up to the new parts of the world that is emerging. So you have links with China, you've links with India. All of those things are happening in parallel with what? The existing relationship they have with the US and the Western world. And the focus has really been on enhancing the non-oil sector. So if you look at the non-oil growth rates in any of the GCC countries, they are quite strong and it's becoming a more resilient story of being not just dependent on how oil prices are going to affect your growth, but it's what other sectors can be invested in and what are the things that we need to put in place so that enough firms come and locate here in order to boost the non-oil sector growth? So far, it seems to be working.

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Prasad: Fed Rate Cut Beneficial for Egypt

Egypt's central bank is widely expected to resume its monetary-easing cycle after a pause last month. The North African country has been on a mission to tamp down inflation that surged to a record 38% in September 2023 as it tries to revamp its economy after securing a bailout last year. Aathira Prasad, Macroeconomics Director at Nasser Saidi & Associates spoke to Bloomberg’s Horizons Middle East and Africa anchor Joumanna Bercetche ahead of the rate decision. (Source: Bloomberg)

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