Car Sales Growth To Mirror Economy

February 2007 | Industry Forecast

BMI estimates that the Egyptian automotive market grew by 20.5% in 2006, which is lower than the 25.0% we had forecast in the previous quarter. We lowered our growth estimate on the basis of a tightening monetary policy, which saw central bank lending and deposit rates hiked by 75 basis points in order to bring down accelerating inflation. The rate hikes have increased the cost of borrowing, hitting the pace of consumer demand. This has been accompanied by the appreciation of the Egyptian pound, which has helped shave off price inflation on imported vehicles and offset the effects of a

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