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00:00Give me a bit of a sense of the relative vulnerability of Egypt's economy to rising food prices. I mean two and a half percent of imports of GDP are are being spent on food. Hi how are you. And up to now we haven't seen for an uptick in domestic food prices reflecting the international edge in commodities prices and that I think relies on two main factors since the beginning of the conflict outbreak. Egypt has extended its inventory of food made food grains from six months to nine months. And I guess that has given them a breather for prices in the domestic market. And the other thing has been the stability of the pound since mid last year. I guess that would start to reflect on prices in the first quarter which this quarter of this year and maybe in the fourth quarter towards the end of the year as well. We are expecting some uptick in inflation rates within the second half of 2021 to an average of six point nine percent vs. four point five percent in the first half. Ali great to have you with us this morning. What is the consequence of that spike up. Everybody's suffering front from this inflation spike. But for central bank policy you are expecting hikes in 2022. What scale. And is it all driven by this inflation spike at the moment. Yes. We're just expecting 100 basis points towards the second half of 2022. And I guess that's where and where inflation and gains momentum towards the upper range of the central bank's target zone which is from five to nine and not only driven by international commodities prices reflection but also oil prices continue with oil price instability. And am I well recovering. Spending patterns we have seen exceptionally high. Private spending growth over the past maybe year. And I guess that would extend towards in the first half of 2022 as well. And giving up some sort of demand in demand put it in pressures on inflation levels. But as I said up in the second half of sense don't you do we expect maintain interest rates or maintain the monetary policy at the higher than. I lived just a couple of days ago we had a ratings update the writer an affirmation from Moody's basically that is on their long term foreign and long term debt profile. So that arguably is supportive to the bond story in Egypt. Well what kind of forecasts are you making for yields and issuances. What are we going to get the close out of twenty one. We're expecting this to remain elevated at these levels. They are now on an average of 50 percent David Westin point two percent. And I guess that would save the case until the end of 2021 with a slight H in 2022 with the rise in quality rates. The rating affirmation and the stable outlook in particular is very positive for the fixed income market. Gemini and particularly the bond market. I'd like to know that starting this quarter as we would expect Egypt to join the G.P.S. the GPO mortgage index for bonds and we expect the implementation or the implementation. Yes. Of the oral pier agreement by the end of this year. So I guess that's all positive news for the fixed income market. The government is expecting a range of 3 to 4 billion U.S. dollars inflows into bond markets in the second half of the year. And I think that's fairly reasonable influence given the passage. But the size of the passive influence that we're expecting with joining the index and the attraction of different clients and these with the European clear agreement.

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Egypt's Macro Outlook in Focus

Alia Mamdouh, Chief Economist at Beltone Financial, discusses Egypt's economy amid regionally high food prices, the country's growth expectations in private spending and long-term debt. She speaks with Yousef Gamal El-Din and Manus Cranny on "Bloomberg Daybreak: Middle East." (Source: Bloomberg)

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