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Monday, 9 November 2020

Egyptian economy to grow 4% on average each year until 2024 -Fitch

Egypt is on track to grow at an average 4% clip over each of the coming four years, which would give it the MENA region’s highest real GDP growth rate between 2020 and 2024, according to Fitch Solutions’ monthly MENA outlook picked up by Ahram Online.

The research firm echoed high hopes for Egypt’s growth: Economic growth is projected to slip to 3.3% in FY2020-2021 from 3.5% last year, making Egypt the only regional economy to avoid contraction, Fitch says. The projections follow similar forecasts from the IMF, World Bank, Deutsche Bank, and the European Bank for Reconstruction and Development. Fitch projected last month that Egypt would close out 2020 clocking economic growth of 3.5%.

But we’ll be spending more than we make: Egypt’s budget and current account balances are both projected to stay in the negative over the coming four years, Fitch says. The budget deficit will average at 10% of GDP between now and 2024, while the current account deficit will average 2.5%. This is more bearish than the IMF’s outlook, which sees the budget deficit widening from 7.5% to 8.1% by the end of the current fiscal year before rapidly narrowing to 5.2% in FY 2021-2022 and 3.8% by FY2024-2025.

And covid-19 will continue to hold us back: Fitch expects that weak prospects for a rebound in key sources of revenue such as tourism and remittances will keep growth muted, but says PMI data suggests the worst of the economic impact of the virus on Egypt has passed.

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