A rise in tourist numbers in Egypt will improve conditions for the nation’s banks, says a ratings agency.
The Ministry of Tourism says tourist arrivals in the first quarter increased by more than half compared with the corresponding period in 2016.
“The increase in tourism is positive for Egyptian banks because it enhances the repayment capacity of borrowers directly and indirectly linked to tourism,” said the statement by Moody’s. “Additionally, the increase in foreign-currency flow from tourism will boost banks’ limited access to foreign currencies, improving their capacity to meet clients’ foreign-currency needs.”
Egypt’s tourism industry, which accounted for nearly a fifth of GDP in 2007, has been battered by political instability and safety concerns linked to terrorism. Including indirect effects, tourism accounted for only 7% of GDP last year, according to the World Travel and Tourism Council.
“The increased availability of dollars from tourism will also allow banks to continue to gradually decrease their net foreign liability position,” said Moody’s.
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