Egypt forecast to escape lightly from credit crunch

14 October 2008
The Egyptian economy will be only lightly affected by the global credit crunch and domestic demand for steel will fall only slightly in 2009, according to the country’s largest steel producer.

“With no exposure to sub-prime credit, the Egyptian economy is showing resilience,” said George Matta, chief marketing officer of Ezz Steel.

“But we expect some slowdown. This will lead to lower domestic consumption and shrinking exports, particularly to the EU, and it is possible that the rate of growth in Egypt will fall by a couple of percentage points against this year’s trend.”

Matta was speaking at MEED’s Middle East Steel 2008 conference in Dubai on 13 October.

“Despite the slowdown, we expect the year to close with 15 per cent year-on-year steel demand growth to 6.23 million tonnes,” he said.

“In 2009, we expect consumption to fall by 2 per cent to 6.13 million tonnes.”

“The longer-term outlook is positive,” said Matta. “By 2012, total Egyptian production will be 12.6 million tonnes and finished capacity will be 11.7 million tonnes.

The bottom line is that the growth momentum in local steel demand will be halted by the impact of the global economic slump in 2009. However, longer-term consumption will be spurred, driven by economic recovery, booming construction and growing industrial production.”

Ezz Steel plans to expand annual production capacity by 3 million tonnes, Matta said.

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