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Wednesday, 7 October 2020

Last night’s talk shows: Mohamed El-Erian on Egypt’s post-covid economic recovery

Celebrations of the 6 October anniversary and Egypt’s 1973 military victory dominated the airwaves last night, with most airing President Abdel Fattah El Sisi’s speech in commemoration of the day: Kelma Akhira’s Lamees El Hadidi (watch, runtime: 1:29), Al Hayah Al Youm (watch, runtime: 1:45), and Masaa DMC’s Ramy Radwan (watch: runtime: 4:29).

The highlight of the evening, however, was Lamees’ interview with Allianz Chief Economist and markets sage Mohamed El-Erian, who was also just recently elected the 42nd president of Queens’ College Cambridge. Tap / click here for the full interview (runtime: 18:46).

By and large, Egypt is doing well in its post-covid economic recovery, partially because of demographic fundamentals such as having a young population that is better able to cope with the virus and requires less hospitalization. The Central Bank of Egypt and the government also moved impressively quickly at the beginning of the pandemic to support the economy and consumers, El-Erian noted, which helped to offset the economic fallout (watch, runtime: 1:18). China is also seeing a stronger economic recovery because it has the benefit of having gone through the crisis first, he said (watch, runtime: 1:12).

The only way out of the economic slowdown for Egypt and the rest of the world is high inclusive growth to generate income and help bring down ballooning debt levels, El-Erian said. Governments can also resort to austerity measures, but austerity is not a permanent solution, he noted (watch, runtime: 1:31).

The global economy and markets look like they’re living in two different dimensions, El-Erian said. Whereas economic growth across the world is less than what is needed — and will fall short of what is possible — markets are doing relatively well by benefiting from central bank stimulus measures, meaning they aren’t reflective of the economic situation on the ground, he noted (watch, runtime: 2:36).

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