HSBC: Businesses in Egypt now more bullish about growth
Businesses in Egypt are more optimistic about their future than they were last year and their expectations for sales growth are the strongest in the Middle East, a new HSBC report said on Wednesday.
The latest HSBC ‘Navigator: Now, next and how’ survey of over 9,100 companies in 35 countries and territories finds that 64 percent of businesses in Egypt are more optimistic now than they were this time last year.
“The country is also becoming much more business friendly, with new investment and licencing laws boosting domestic and foreign business activity. All these factors are driving business optimism for future growth.” Richard Lelong, Country Head of Commercial Banking, HSBC Egypt
88 percent of survey respondents expect their sales to rise over the next 12 months – making Egypt’s businesses the most optimistic compared to other surveyed countries in the Middle East; the UAE, Turkey, and Saudi Arabia. Two in five Egyptian businesses expect to grow by 15 percent or more, compared to only a quarter globally and one third in the Middle East, according to HSBC report.
“As Egypt’s economy continues to gather strength, businesses in Egypt are becoming more confident about growth.” Richard Lelong, Country Head of Commercial Banking, HSBC Egypt said.
“Although, short-term pain associated with economic reforms has undoubtedly been challenging, the underlying strength they are intended to deliver to the country should provide a firm foundation for future growth and business dynamism.”
“The country is also becoming much more business friendly, with new investment and licencing laws boosting domestic and foreign business activity. All these factors are driving business optimism for future growth.” Lelong added.
HSBC’s survey finds that 87 percent of Egypt’s businesses expect international trade growth – consistent with the rest of the Middle East. This is driven by the desire to enter new markets ahead of competitors, and proven customer demand. Eight out of ten see international trade as a force for good, saying that it will drive innovation, improve efficiency, and provide new business opportunities.
Although three quarters of Egypt’s businesses surveyed say protectionism is increasing in their key markets, most believe there is more to gain than to lose. Strategies being deployed to cope include increasing capital reserves (36 percent) and reducing borrowing (29 percent).
The Navigator survey also shows that Egypt’s businesses are under pressure from competitors, investors and governments alike to become more sustainable over the next five years. In response, firms are expecting to invest more in energy efficiency, technology, innovation and infrastructure, and workplace diversity and equality. However, they are keen to get more insights and information around implementing these practices.
“However, we are also seeing Europe, North America and mainland China grow in importance as well, which proves Egypt’s businesses are keen to be agile as they assess new opportunities across other key trade corridors,” Chaker Zeraiki, Country Head of Global Trade and Receivable Finance, HSBC Egypt,
“Egypt’s ideal location, being a global gateway and the connection point for business across Africa and the Middle East, means that companies here will always have the flexibility they need to future-proof their growth.” Chaker Zeraiki, Country Head of Global Trade and Receivable Finance, HSBC Egypt, said.
“We also expect technology, digitisation and data to play an increasingly important strategic role enabling businesses to develop their products and services, reach new customers and cut costs by improving operational efficiency.”
Looking at the trade routes most important to businesses in Egypt, 59 percent view the Middle East region as their top trading partner – “a trend that we also saw this time last year.”
“However, we are also seeing Europe, North America and mainland China grow in importance as well, which proves Egypt’s businesses are keen to be agile as they assess new opportunities across other key trade corridors,” Chaker added.
