Big UK tax cuts could delay start of BOE rate cuts. If big tax cuts are announced at the U.K.’s March 6 budget it could complicate the Bank of England’s task of containing inflation and cause interest-rate cuts to be delayed until August, TD Securities strategists write in a note. (WSJ)

China Evergrande's financial mess isn't over. A Hong Kong court has ordered the failed Chinese property developer, China Evergrande, to liquidate. (Axios)

How escalating Red Sea crisis poses billions of dollars of risk for India. Houthi attacks on the Red Sea have forced shippers to avoid one of the world’s most crucial trade routes. (Al Jazeera)

UN trade body has ‘profound concerns’ over Panama Canal, Red Sea disruptions. Global supply chain disruptions throughout the Red Sea, the Panama Canal and the Black Sea have drawn the attention of the United Nations’ trade and development body. (Sourcing Journal)

US winning world economic war. The United States economy grew faster than any other large advanced economy last year—by a wide margin—and is on track to do so again in 2024. (Axios)

US economy added 353,000 jobs in January, much better than expected. Nonfarm payrolls expanded by 353,000 for the month, better than the Dow Jones estimate for 185,000. The unemployment rate held at 3.7%, against the estimate for 3.8%. (CNBC)

No doom and gloom: Global recession risk has receded, IMF says. Gone are the gloomy warnings of an imminent global recession. Economists at the International Monetary Fund see improving results, on both inflation and growth, compared with just a few months ago. (Axios)

Ghana: Transforming a crisis into a journey toward prosperity. Ghana is making important inroads to stabilize its economy, and continued program implementation beckons a brighter future. (IMF)

Carton shortage may last through school year, but brandless packaging brings relief. Pactiv Evergreen said it’s producing half-pint cartons at maximum capacity as a supply chain disruption still challenges dairies and schools. Some people suggest the problem originates from an Ohio converting plant shuttering. (Packaging Dive)

UK border checks on food begin on Brexit’s 4th anniversary. After several delays and postponements, border checks on certain foods being imported to the UK from Europe are finally kicking in. (Bloomberg)

Zambia pitches debt-revamp proposals for private China loans. Nation has struggled for three years to revamp its debts. (Bloomberg)

Euro zone inflation eases as expected, but core figures disappoint. Euro zone headline inflation eased slightly in January, flash figures published by the European Union’s statistics agency showed Thursday, while core figures declined less than expected. (CNBC)

Top carmakers at risk of using Uighur forced labor in China, report says. Brands such as General Motors, Toyota and Volkswagen not doing enough to track their supply chains, rights group says. (Al Jazeera)

Egyptian Economic Crisis: Public Debt Continues to Mount

Kendall Payton, editorial associate

Egypt’s economic growth is slower than expected as the pound weakens due to geopolitical and currency factors such as inflation cuts in purchasing power and repercussions of the Gaza crisis digging into its main sources of currency. Some economists say war or peace in the Middle East depend on several countries—but Egypt is one of the most important countries holding weight.

Diverted shipping due to sea attacks from Yemen’s Houthis caused revenue from the Suez Canal to fall 40% in early January, according to Reuters. And the crisis in Gaza has also weakened the tourism sector. The IMF’s $3 billion financial support loan signed in December 2022 has come to a halt after Egypt’s pledge to move to a flexible exchange rate regime and sell state assets has been paused. "Real GDP growth is expected to slow down further during fiscal year 2023/24 before gradually picking up thereafter," Egypt’s central bank's Monetary Policy Committee said in a statement. “The marked slowdown is primarily due to a contraction in gross domestic investments while net exports and consumption were the main drivers of growth in economic activity.”

Price rises on goods have also spiked the cost of living beyond affordability for most across the country. The Egyptian pound’s fall against the dollar has caused increased competition in hard currency needed to pay for foreign goods. “These macroeconomic challenges have considerable repercussions for ordinary Egyptians, including increased poverty and unemployment,” said Saif Islam, an associate in Strategic Intelligence with risk consultancy firm. “These socio-economic challenges will likely exacerbate in the coming year, especially in light of the anticipated further devaluation of the Egyptian pound.”

Though many economists speculate Cairo to default due to its economic and financial strains, some expect the circumstances to garner political change. The need to focus on controlling the expansion of the money supply and adding it to GDP growth rates outside of economic growth rates is essential. It is necessary in order to calm inflationary pressures driven by an increase in money issuance outside of the rates of economic growth. Additionally, the IMF warned uncertainties remain and central banks now face other risks. “They must avoid premature easing that would undo many hard-earned credibility gains and lead to a rebound in inflation,” the IMF said in its World Economic Outlook’s January edition. “But it will be equally important to pivot toward monetary normalization in time, as several emerging markets where inflation is well on the way down have started doing so already.”

By the numbers: Customers in Egypt have averaged 47 days beyond terms, with 62% of credit professionals saying payment delays have remained the same, per the FCIB Credit and Collections Survey. The most common causes for payment delays are central bank and cash flow issues (57%), billing disputes and supply chain issues (43%) and customers inability to pay (29%).

What FCIB Credit and Collections Survey respondents are saying:  

• “The best possible way to secure the biggest portion of money is to receive a decent down payment and use L/C for all your transactions.” 
• “Use collateral and secure payment methods.” 
• “Establish strong partnership with internal Sales team. Gain knowledge of the potential customer relationship Sales is pursuing as early as possible. This will help make the Credit/AR department a more equitable partner in the O2C process and stakeholder in the relationship.” 
• “With continued global inflation, war in Ukraine and high interest, you need to know your true legal customer to prevent fraud and keep your A/R secured.”
• “Ensure stringent contracts are in place and don't expect to be paid to terms. Secured terms are advised.”
• “Do due diligence for all prospect customers, especially to those small-medium privately held companies with no financials or credit reports. Check the profile and validate business addresses, the company domain e-mail address, etc. and start with small, reasonable credit line and reasonable payment terms.”

The  FCIB Credit and Collections Survey  is now open. It covers China, Colombia, Ecuador and India. You will earn ICEU/Participation credit for your input. Be sure to share the link with your credit and collections network.   

Week in Review Editorial Team:

Annacaroline Caruso, editor in chief

Jamilex Gotay, editorial associate

Kendall Payton, editorial associate