Managing Director of Citi Bank says the increased external trade environment will affect Egypt badly.
Managing director and head of Emerging Markets Economics at Citi Bank David Lupin said Monday at Euromoney conference that if Egypt continues to rely on cheaper imports, its budget deficit will go up, asserting that policy makers face a challenge in balancing the ratio of real liberalization to financial liberalization.
Lupin also stressed that Egypt needs to carry out more hard-to-implement reforms.
“Egypt needs to be careful with trade liberalization,” he said, adding that if Egypt kept relying on imports that are cheaper, the deficit will go up.
Lupin said during the Euromoney Conference that the number of tourists who visit Egypt needs to rise, because tourism is a labor-intensive sector that has a positive impact on other industries like the food industry and small and medium enterprises.
“Egypt needs to focus on labor-intensive industries like tourism. Foreign Direct Investment in Egypt is successful, and has an overall impressive performance, but I think the external trade environment will affect Egypt badly,” according to Lupin.
However, he reiterated that Egypt needs to focus on labor-intensive industries like tourism.
Egypt needs to be connected to international markets
“Egypt needs to be connected to international markets,” Head of Global Capital Markets at Euroclear Sudip Chatterjee also said in a panel at Euromoney conference Monday.
Answering a question about the effect of trade wars and global slow down on Egypt’s growth, Chatterjee said that the state needs to work with the capital markets and make the domestic market ready and more friendly to international investors.
“Egypt has issues in bringing hard currency. We reach out to the foreign market to make them invest in Egypt. An action that would strengthen the Egyptian pound,” she stated.
Chatterjee added that Egypt has strong investment foundation. “One thing is a $100 billion market which is there. We work in the framework of the Egyptian capital market.”
Egypt can follow some other markets in increasing FDI, like Malaysia and Indonesia, according to Chatterjee.