Boston, MA -- (SBWIRE) -- 08/02/2012 -- The Egypt Retail Report examines the long-term potential of the local consumer market, but flags shortterm concerns about the impact on Egypt's economic outlook of a collapse in fixed investment and exports that is continuing to weigh heavily on the headline GDP growth figure.
The report examines how best to maximise returns in the Egyptian retail market while minimising investment risk, and also explores the impact of the recession in the eurozone (which absorbs one-quarter of Egyptian exports) on the Egyptian consumer and on the ability of producers and exporters to realise returns in the short term.
The report also analyses the growth and risk management strategies being employed by the leading players in the Egyptian retail sector, as they seek to maximise the growth opportunities offered by the local market.
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Egyptian per-capita consumer spending is forecast to more than double by 2016, compared with a regional growth average of only 7%. The country comes last in BMI's Middle East and Africa Retail Risk/Reward Ratings, although it outperforms slightly for Reward.
Among all retail categories, autos will be the outperformer through to 2016 in growth terms, with unit sales forecast to increase by 126% between 2012 and 2016, from 185,680 units to 419,598 units. Car ownership in Egypt is estimated at around 23 cars per 1,000 people, compared with 35 per 1,000 in Iran and more than 100 per 1,000 in Saudi Arabia, which means the country has considerable room for growth.
In the competitive arena, BMI sees upside potential in trade tariff reform between Egypt and the EU, which will open the market for more overseas manufacturers and expand export opportunities for domestic producers.
Over the last quarter, BMI has revised the following forecasts/views:
- The Egyptian economy continues to stagnate, and is unlikely to emerge from its rough patch until late 2012 or early 2013 under even a best-case scenario. BMI is forecasting real GDP growth of 2.3% and 4.6% in FY2011/12 and FY2012/13 respectively, with private consumption and an improved net export position likely to boost the headline growth figure.
- BMI maintains a broadly optimistic outlook on household consumption, despite the relatively weak employment backdrop. We forecast private expenditure to increase 4.0% and 5.0% in real terms in FY2011/12 and FY2012/13 respectively.
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