Encouraging signs for Egypt’s economy

After years of uncertainty and turbulence, Egypt’s economy is beginning to show some signs of recovery, with a marked rise in business confidence helping to strengthen indicators in both capital markets and the broader economy.

Emerging signs of growth are welcome not only for investors, but also for the government, following the economy’s decline since the 25 January Revolution in 2011. The political upheaval pushed GDP growth down to 2%, and depleted foreign currency reserves by half, while both foreign and domestic investors fled, sending the benchmark Egyptian Exchange (EGX) 30 stock market index down by nearly 50% at its lowest point.

The rebound in the stock market is one indicator that suggests Egypt has turned a corner. The EGX 30 has rallied recently, not only recouping previous years’ losses but pushing past pre-revolutionary levels by more than 20%.

The upward momentum has attracted a flood of new listings, according to the chairman of the EGX, Mohamed Omran, in a recent interview with Reuters, with 10 companies expected to list by year-end. The recent spate of activity, Omran noted, is a “very positive indicator that the Egyptian economy has started to recover”.