Back to the complete issue
Monday, 4 May 2020

Gov’t cuts growth outlook for FY2020-2021 — again

Gov’t again cuts growth outlook for FY2020-2021: The government has revised downward its growth outlook for FY2020-2021 to 2% from 3.5% should the covid-19 pandemic continue into December, according to a statement by Planning Minister Hala El Said carried by the press. Growth projections for the coming year had already been lowered less than two weeks ago to 3.5% from 4.5% based on the assumption that the crisis would abate by June. GDP figures will be cut by another 30% if it extends past that point, El Said said at the time.

Private sector investment could also fall by up to 30% in FY2020-2021 if the crisis persists until December, El Said said. The government still expects around EGP 740 bn in total investments in the coming year, helped by the 33% increase in state investment to EGP 281 bn allocated in the draft FY2020-2021 budget.

A worse-er case scenario? The government estimated at the end of March that GDP would slow to 3.3-3.5% if the pandemic was to continue through December, labelling this as a “worst case scenario.” The Finance Ministry left its projections for FY2020-2021 GDP growth unchanged from the original assumptions when the ministry drafted the budget before the virus hit but made clear it would revisit its forecasts once the economic impact of the pandemic became clearer.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.