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For more than two decades Mexico’s banking sector has been characterised by sound regulation, high capital adequacy ratios and strong profitability. Having learned from previous experiences, the Mexican banking sector emerged relatively unscathed from the 2008 global financial crisis. Since then, lending growth and profitability have picked up, despite a relatively sluggish economy, as has the sector’s share of the economy, with assets as percentage of GDP standing at 41.4% at the end of 2016. With interest rates climbing higher, consumer confidence weakening and macroeconomic uncertainty prevailing, credit growth in Mexico is likely to continue to moderate through 2017, with market observers viewing mortgage lending as being particularly sensitive to the interest rate cycle. Over the longer term, the authorities’ efforts to boost financial inclusion across the country will be crucial to the development of the sector, as well as to socio-economic advances more generally. This chapter features an interview with Agustín Carstens, Governor, Banco de México.

From being relatively closed and heavily dependent on oil exports to drive growth and accrue foreign currency, Mexico has progressively liberalised and integrated into regional and global value chains. Although economic openness left Mexico more exposed to the global financial crisis than some of its Latin American peers, its economic profile has since allowed it to bounce back as global trade and investment flows recover. Uncertainty is likely to constrain investment in 2017, at least until there is clarity as to the impact of changes in US trade and investment policy. Once the short-term turbulence has been negotiated, a modest acceleration in growth is likely, while continued fiscal and monetary policy vigilance should see debt sustainability assured and inflation pressures contained. This chapter includes interviews with Ildefonso Guajardo Villarreal, Minister of Economy; Paulo Carreño King, Director-General, ProMéxico; and Valentín Díez Morodo, President, Mexican Business Council for Foreign Trade.

As cranes tower over the skies of an ever-expanding Cairo and billboards advertising new housing developments, universities and malls proliferate throughout the city, it is clear that after several years of uncertainty Egypt is in the midst of a construction boom. Large government priority projects, such as the New Administrative Capital, the expansion of the Cairo metro and water treatment projects in Upper Egypt, continue to promote growth in the sector. The Ministry of Finance cites construction as one of the most important sectors in terms of its contribution to economic growth in the coming years. With strong demand for energy and infrastructure projects, as well as real estate, the sector is likely to see steady expansion. However, it has not been immune to the short-term economic instability in the aftermath of the currency float, posing challenges amid potential. This chapter contains an interview with Osama Bishai, CEO, Orascom Construction.

OBG introduces the reader to the different aspects of the legal system in Egypt, in partnership with Helmy, Hamza & Partners. OBG talks to Mohamad Talaat, Managing Partner, Helmy, Hamza & Partners, on beneficial laws and current developments.

In conjunction with Deloitte, OBG explores the taxation system, examining Egypt’s investor-friendly environment.