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Sunday, 29 November 2020

Economy to grow at 2.8-4% clip next fiscal year, Maait says

Egypt’s economy is expected to grow between 2.8-4% in FY2021-2022, Finance Minister Mohamed Maait told DMC over the weekend (watch, runtime: 8:28). The minister had previously said GDP growth would “recover significantly” at the start of FY2021-2022, but stopped short of giving a figure. The World Bank last month forecast a 5.8% growth rate for Egypt’s economy over the same period, while a Reuters poll put growth for the next fiscal year at a more conservative 5%. Maait had said Egypt’s economy is expected to close out the current fiscal year with 2.8-3.5% growth, penciling in a more conservative estimate than the 3.5-3.8% Deputy Planning Minister Ahmed Kamaly had projected earlier this month.

EVERYBODY LOVES EGYPT heading into 2021. We’re the only MENA economy set to grow this year, and the EGX is undervalued compared to regional peers, with the benchmark EGX30 having shed about 20% of its value YTD. From the real economy to the stock market, we’re on the list next year for everybody from Fitch and the EBRD to Credit Suisse (here and here).

Egypt’s economy is estimated to have grown 3.8% in FY2019-20, according to preliminary figures. The government had initially projected 6% growth for the fiscal year, but fell short of its target as a result of the economic fallout from covid-19.

MEANWHILE- Government spending on fuel subsidies fell 77% in FY2019-2020 to EGP 18.6 bn, while outlays on food assistance slid 7.6% to EGP 80.4 bn, according to new figures (pdf) published yesterday by the Finance Ministry.

Tax revenues up last year despite the impact of covid: Despite the body blow to tax receipts by the pandemic in the fourth quarter of 2019-2020, tax revenue rose 2.5% to EGP 676.8 bn from the previous fiscal year, the report adds.

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