Stability boosts improving investment outlook in Egypt

Significance

The upgrade comes in the wake of Egypt's Economic Development Conference (EEDC) last month, a major international conference that sought to showcase Egypt as an attractive destination for international investment under the regime of President Abdel Fattah El Sisi. These measures form part of the government's strategy of attracting foreign direct investment (FDI) in order to kick-start the economic recovery and create jobs to tackle rising unemployment. It is also seeking to present a positive image to international banks ahead of a planned return to the international bond markets later this year.

Impacts

• Reforms do not include plans to use FDI for urgently needed industrial infrastructure upgrades or promote higher value-added activities.
• A rise in FDI and GDP growth will underpin support for Sisi regime.
• Egypt's planned issuance of a 1.5 billion dollar bond on international markets will be the next major test of investor confidence.