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MENA FN: Egypt Economy to recover in 2018 with expected inflation hikes

A gradual recovery in the economy is expected in 2018, with 2017 being difficult but paving the way for a better year: Arqaam Capital.
13.07.17 | Interesting article at MENA FN

A gradual recovery in the economy is expected in 2018, with 2017 being difficult but paving the way for a better year with both consumers and investors coping with the changes and absorbing the shocks of the past two years, according to Arqaam Capital.
Arqaam Capital banking group has recently issued a report to look into the status of the Egyptian economy and the expected events and circumstances over the upcoming period.

After the imposition of the 13% value-added tax (VAT) in November 2016, an increase of 1% is expected to take place soon, taking VAT to 14% and causing inflation to jump to nearly 35%, alongside with energy hikes and the re-pricing of many government services, according to Arqaam's report.

Inflation and interest rates should decline in 2018, and the New Investment Law's regulations are nearly complete. The difficult preparations of 2016 and 2017 should reap their benefits for consumers and investors in 2018 if other bureaucratic impediments are removed. 'The government, however, is notorious for imperfect communication, an incomplete vision, and following through with comprehensive reforms, all while restructuring public services properly to protect the poor,' Arqaam added. In terms of headline inflation, it is expected to decline as of November 2017 as the positive base effect kicks in. It will then prevail in 2018, gradually declining until it breaks the single digit level in late 2019 or early 2020.