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Sunday, 21 June 2020

FinMin sees Egypt’s economy growing 5% next fiscal year, Maait says

Gov’t revises its FY2020-2021 growth target upward to 5%: The Finance Ministry sees Egypt’s GDP growing at a 5% clip in FY2020-2021, Minister Mohamed Maait said in a webinar hosted by the British Egyptian Business Association on Thursday. The figure is higher than the Planning Ministry’s most recent projection — which penciled in 3.5-4% growth in a scenario where the pandemic had been curbed by this month. Maait had previously told Enterprise that a best-case scenario in which the pandemic is brought under control by July could see Egypt’s GDP growing at 4.5-5% in FY2020-2021.

Growth during the current fiscal year will close in at 3.54%, down from a target of 6%. The new target is a little lower than the 4-4.2% Maait had said the government was expecting earlier this month. The debt-to-GDP ratio is expected to widen to 85.8-87% from an initial estimate of 82.3%, according to Maait. The budget is also expected to run a deficit of 7.5% against a pre-pandemic target of 5%.

Egypt is on track to further diversify its financing resources through green bonds, sukuk, and a bond offering in an unspecified Asian currency, along with traditional bond offerings. Egypt’s maiden sukuk issuance is pending cabinet and approval of the legislation it had drafted in February to unlock access to the sharia-compliant bonds. Once the legislation is passed, the ministry will set the size and the timing of the country’s first offering, which would depend on market conditions, Maait said.

Also on Thursday: Egypt’s unemployment rate would have fallen to 6% right about now were it not for covid-19, Planning Minister Hala El Said told MPs. The minister highlighted in a post-meeting statement (pdf) that Egypt is looking to build some 45k new classrooms and is looking to roll-out “middle-class oriented schools such as Japanese and international schools with the participation of the private sector.”

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