Some 62% of Egyptian business leaders report being optimistic about the year ahead, according to Grant Thornton's latest International Business Report (IBR) in Q2 2024. The findings reflect record-high global levels of optimism, with 71% of global mid-market business leaders optimistic about the next 12 months (up five points from Q1 2024) – a rebound to pre-COVID levels. The latest IBR data highlights the resilience of the global economy, despite the ongoing uncertain geopolitical landscape.
Just under half (44%) of Egyptian business leaders expect to see revenues grow during the next 12 months and 67% expect to see profits growing, in line with global expectations but down from the 75% high in the previous quarter. Just over half of respondents (51%) anticipate they would be increasing selling prices in the year ahead, down 14 percentage points from 65% in Q1 2024.
During the period of data collection, macro conditions on the local level remained impacted by geopolitical uncertainty that trickled down into a foreign currency shortage with wide-reaching impacts on business. In saying this, in March 2024, Egypt reached a staff level agreement with the International Monetary Fund (IMF) to extend facilities to USD 8 billion, which would be the first of a series of foreign currency injections into the country in the months that followed.
The record number of investment and economic reforms – which include a renewed state IPO program, a historic USD 35 billion deal with the UAE to develop Ras El Hekma, and a flurry of fresh agreements with EU partners to the tune of EUR 49 billion signed during the Egypt-EU Investment Conference in July 2024 — saw S&P, Moody’s and Fitch raise Egypt’s economic outlook to positive, which is anticipated to trickle down to business sentiment in the months ahead.
Egyptian firms continue to see the importance of international expansion as a key driver for growth, in line with Egypt’s overarching ambitions to bolster exports. Some 53% of firms plan to increase their focus on international markets to access a wider client base, enhance product and service quality, and diversify revenue streams. To achieve this, business leaders intend to make numerous investments, with the two most significant centres being technology, where 44% of respondents reported increased spending, and talent at 42%, mirroring global sentiment to retain top talent and remain competitive as AI advancements press on.
While most investment planks dipped compared to the previous quarter, the singular uptick was in sustainable initiatives. IBR data reveals that 29% of Egyptian firms surveyed report investing in sustainable initiatives, up 4 percentage points compared to the previous quarter. Renewed focus on sustainability initiatives is at least partly driven by government efforts to regulate ESG reporting for private and publicly listed firms. Business leaders are also aware that to remain competitive in markets abroad, actionable and measurable steps must be taken on the environmental and social fronts to meet more stringent stakeholder demands.
Almost across the board, respondents in Egypt reported fewer overall concerns, mirroring the overall level of optimism as the business environment and macro conditions improve. Issues on top of mind for business leaders locally were geopolitical disruption and economic uncertainty, cited by 27% and 26% of respondents respectively, although the figures remain significantly lower than findings in the wider EMEA region. A staggering 94% of Egyptian business leaders report being prepared for future unforeseen circumstances, reflecting the resilience of the market.
Kamel Saleh, CEO of SBA – Grant Thornton, commented: “The latest data coming out of our IBR underscore the resilience of the Egyptian market despite economic and geopolitical uncertainty. A commitment to innovation, talent development, and sustainable growth remains top priority for business leaders in Egypt as they work to augment their positioning, embrace change and remain competitive.
The recent economic reforms and international collaborations have set a positive tone for the months ahead. We are particularly encouraged by the significant investments in technology and talent, which are crucial for maintaining our competitive edge in an era of rapid AI advancements. Additionally, our increased focus on sustainable initiatives reflects dedication to not only business growth but contributing positively to the market, society and the planet.”
Peter Bodin, CEO of Grant Thornton International Limited commented: "Our latest IBR findings reveal a remarkable resurgence in mid-market optimism, reaching pre-COVID levels despite ongoing global challenges. This resilience, particularly driven by strong performance in markets like the US, underscores the adaptability and potential of mid-market businesses worldwide.
The surge in international sales expectations and unprecedented investment intentions, especially in technology and R&D, signals a decisive shift from the caution we observed in the previous quarter. Businesses are now focused on strategic growth, boosted by higher profitability expectations and a more favourable economic environment.
However, this optimism is balanced by concerns such as resource scarcity, geopolitical uncertainties, and complex operational challenges. It's clear that while businesses are ready to invest, they're doing so with a measured approach, carefully balancing growth ambitions with operational and financial prudence.
As we navigate this complex landscape, agility and forward-thinking are crucial. The green transition and technological advancements, particularly AI, will be pivotal in shaping economic prospects. Our data suggests that mid-market businesses are strategically positioning themselves to harness these opportunities, recognising the need to equip their workforce alongside technological investments.”
For insights into global findings uncovered by Grant Thornton's latest International Business Report, tap here.
International Business Report (IBR)
The International Business Report (IBR) is the world’s leading survey of mid-market companies. Launched in 1992, the IBR now provides insight into the views and expectations of around 10,000 businesses across 28 economies.
The research takes place twice a year and involves interviews with chief executive officers, managing directors, chairpersons or other senior executives from all industry sectors. Questionnaires are translated into local languages and fieldwork is undertaken through both online and telephone interviews.
The IBR data is referenced extensively in thought leadership by the Grant Thornton network and is the basis for our Global business pulse, the first index to track the health of mid-sized companies at a global, regional, country and sector level. Find out more about the index methodology here or explore the unique content that we create with the help of our many experts.
News
Egypt firms retain high levels of optimism, mirroring global outlook
07 Jul 2024
Some 62% of Egyptian business leaders report being optimistic about the year ahead, according to Grant Thornton's latest International Business Report (IBR) in Q2 2024. The findings reflect record-high global levels of optimism, with 71% of global mid-market business leaders optimistic about the next 12 months (up five points from Q1 2024) – a rebound to pre-COVID levels. The latest IBR data highlights the resilience of the global economy, despite the ongoing uncertain geopolitical landscape.
Just under half (44%) of Egyptian business leaders expect to see revenues grow during the next 12 months and 67% expect to see profits growing, in line with global expectations but down from the 75% high in the previous quarter. Just over half of respondents (51%) anticipate they would be increasing selling prices in the year ahead, down 14 percentage points from 65% in Q1 2024.
Macro backdrop
During the period of data collection, macro conditions on the local level remained impacted by geopolitical uncertainty that trickled down into a foreign currency shortage with wide-reaching impacts on business. In saying this, in March 2024, Egypt reached a staff level agreement with the International Monetary Fund (IMF) to extend facilities to USD 8 billion, which would be the first of a series of foreign currency injections into the country in the months that followed.
The record number of investment and economic reforms – which include a renewed state IPO program, a historic USD 35 billion deal with the UAE to develop Ras El Hekma, and a flurry of fresh agreements with EU partners to the tune of EUR 49 billion signed during the Egypt-EU Investment Conference in July 2024 — saw S&P, Moody’s and Fitch raise Egypt’s economic outlook to positive, which is anticipated to trickle down to business sentiment in the months ahead.
Investment intentions
Egyptian firms continue to see the importance of international expansion as a key driver for growth, in line with Egypt’s overarching ambitions to bolster exports. Some 53% of firms plan to increase their focus on international markets to access a wider client base, enhance product and service quality, and diversify revenue streams. To achieve this, business leaders intend to make numerous investments, with the two most significant centres being technology, where 44% of respondents reported increased spending, and talent at 42%, mirroring global sentiment to retain top talent and remain competitive as AI advancements press on.
While most investment planks dipped compared to the previous quarter, the singular uptick was in sustainable initiatives. IBR data reveals that 29% of Egyptian firms surveyed report investing in sustainable initiatives, up 4 percentage points compared to the previous quarter. Renewed focus on sustainability initiatives is at least partly driven by government efforts to regulate ESG reporting for private and publicly listed firms. Business leaders are also aware that to remain competitive in markets abroad, actionable and measurable steps must be taken on the environmental and social fronts to meet more stringent stakeholder demands.
Business concerns
Almost across the board, respondents in Egypt reported fewer overall concerns, mirroring the overall level of optimism as the business environment and macro conditions improve. Issues on top of mind for business leaders locally were geopolitical disruption and economic uncertainty, cited by 27% and 26% of respondents respectively, although the figures remain significantly lower than findings in the wider EMEA region. A staggering 94% of Egyptian business leaders report being prepared for future unforeseen circumstances, reflecting the resilience of the market.
Kamel Saleh, CEO of SBA – Grant Thornton, commented: “The latest data coming out of our IBR underscore the resilience of the Egyptian market despite economic and geopolitical uncertainty. A commitment to innovation, talent development, and sustainable growth remains top priority for business leaders in Egypt as they work to augment their positioning, embrace change and remain competitive.
The recent economic reforms and international collaborations have set a positive tone for the months ahead. We are particularly encouraged by the significant investments in technology and talent, which are crucial for maintaining our competitive edge in an era of rapid AI advancements. Additionally, our increased focus on sustainable initiatives reflects dedication to not only business growth but contributing positively to the market, society and the planet.”
Peter Bodin, CEO of Grant Thornton International Limited commented: "Our latest IBR findings reveal a remarkable resurgence in mid-market optimism, reaching pre-COVID levels despite ongoing global challenges. This resilience, particularly driven by strong performance in markets like the US, underscores the adaptability and potential of mid-market businesses worldwide.
The surge in international sales expectations and unprecedented investment intentions, especially in technology and R&D, signals a decisive shift from the caution we observed in the previous quarter. Businesses are now focused on strategic growth, boosted by higher profitability expectations and a more favourable economic environment.
However, this optimism is balanced by concerns such as resource scarcity, geopolitical uncertainties, and complex operational challenges. It's clear that while businesses are ready to invest, they're doing so with a measured approach, carefully balancing growth ambitions with operational and financial prudence.
As we navigate this complex landscape, agility and forward-thinking are crucial. The green transition and technological advancements, particularly AI, will be pivotal in shaping economic prospects. Our data suggests that mid-market businesses are strategically positioning themselves to harness these opportunities, recognising the need to equip their workforce alongside technological investments.”
For insights into global findings uncovered by Grant Thornton's latest International Business Report, tap here.
International Business Report (IBR)
The International Business Report (IBR) is the world’s leading survey of mid-market companies. Launched in 1992, the IBR now provides insight into the views and expectations of around 10,000 businesses across 28 economies.
The research takes place twice a year and involves interviews with chief executive officers, managing directors, chairpersons or other senior executives from all industry sectors. Questionnaires are translated into local languages and fieldwork is undertaken through both online and telephone interviews.
The IBR data is referenced extensively in thought leadership by the Grant Thornton network and is the basis for our Global business pulse, the first index to track the health of mid-sized companies at a global, regional, country and sector level. Find out more about the index methodology here or explore the unique content that we create with the help of our many experts.
