10 Oct 2021

The World Bank released an economic update for Egypt, raising its forecast for Egypt’s GDP growth in FY21/22 to 5%, up from 4.5%. GDP growth in FY20/21 registered 3.3%. One of the reasons behind the higher forecast are the rebound in the tourism sector as global travel restrictions are eased, especially from some of the countries that have sent the most tourists to Egypt in the past. Some of the other drivers of the high economic growth forecasted for Egypt in the current fiscal year are an increase in natural gas extraction and exports, significant public investments especially in infrastructure, and considerable growth in the ICT (information & communication technology) sector. Global economic growth is also expected, which would contribute to growth in Egypt. There are also favourable base effects during this fiscal year.

The opinion of the World Bank is that Egypt’s economy has demonstrated buoyancy and resilience all through the pandemic. Monetary easing policies and support to targeted sectors that were most vulnerable to the pandemic’s negative economic effects relieved some of the burden from businesses and households. On a structural level, reforms that were taken in the past few years, especially those implemented in consultation with the IMF, paid off in this crisis. Coupled with stronger public debt management, Egypt was deemed creditworthy enough to receive generous international financing and support as needed. The past reforms have also improved the business environment and increased financial inclusion, bringing more businesses out of the shadow economy and broadening the tax base while enhancing economic activity.

(Source: World Bank (English), al-Ahram (English), al-Maal)