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Thursday, 26 July 2018

Preliminary figures show Egypt’s GDP growth rose to 5.3% in FY2017-18

Preliminary gov’t figures show Egypt’s GDP growth rose to 5.3% in FY2017-18: Egypt’s GDP grew to 5.3% in FY2017-18, its highest rate in a decade, according to preliminary figures that Planning Minister Hala El Saeed announced yesterday during the Madbouly Cabinet’s weekly meeting. GDP grew to 5.4% in the third and fourth quarters of the fiscal year that ended on 30 June, thanks largely to a growth in both government and private sector investments and exports, which together make up 74% of total economic growth in FY2017-18, according to a cabinet statement (pdf). Non-oil exports were up 12.3% y-o-y for the year to USD 24.1 bn, led by increased exports from the chemical, textile, and engineering industries.

Finance Minister Mohamed Maait reaffirmed that Egypt achieved a primary surplus of 0.2% for the first time in 15 years in FY2017-18, according to a statement from the State Information Service. The overall budget deficit is also currently under 10% and the debt-to-GDP ratio had also dropped, he said, without mentioning figures. Maait had previously said that Egypt’s overall budget deficit is expected to have narrowed to 9.8% in the last fiscal year. The Madbouly Cabinet will be working to achieve a primary budget surplus of 2% for FY2018-19, in addition to a GDP growth rate of 5.8% and sovereign debt level of 93% of GDP.

Economists polled by Reuters aren’t as optimistic about this year’s GDP projections, seeing the economy growing at 5.2% in FY2018-19. The figure has even fallen short of the IMF’s projection of 5.5%. “The country has made significant progress under the IMF loan programme thus far and therefore Egypt’s medium-term economic growth prospects remain strong,” NKC African Economics’ Nadene Johnson tells the newswire, adding that pushing ahead “with the difficult reforms will be key to unlocking Egypt’s growth potential.”

As for next year’s projects, the median forecast of 12 respondents was for GDP to reach 5.5%.

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