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Wednesday, 2 June 2021

Are we there yet?

Egypt is expected to (almost) match its pre-pandemic growth level in this final quarter of the state’s current fiscal year. The economy is penciled in to grow 5.2-5.5% this quarter, which wraps up on 31 June, according to figures Planning and Economic Development Minister Hala El Said presented at today’s cabinet meeting. While growth for the full fiscal year is still expected to be muted as the economy expanded only 1.9% during the first nine months, the hopeful forecast for the final quarter puts us on track to lean toward pre-pandemic growth levels in FY2021-2022.

What’s the outlook like? Forecasts from the IMF and the African Development Bank put growth for the upcoming 2021-2022 fiscal year and in 2022 at between 5.0% and 5.5%, which is just slightly lower than a 5.8% pre-covid target the government was hoping to achieve in FY2019-2020. The government predicted growth of 5.4-6.0% in FY2021-2022 in the draft budget approved in March.

Egypt’s economy grew at a 2.9% clip in 3Q2020-2021, up from 2% in the previous quarter, thanks to a recovery in the tourism sector, El Said said. Other areas that had been hit by the pandemic, including manufacturing and Suez Canal revenues, have also had a better run so far into the year, the minister said. The third quarter of the state’s ongoing fiscal year ran between January and April 2021. Growth in 3Q2020-2021 was more or less in line with government forecasts, which put growth for the quarter at 2.8% earlier this year.

The telecom, construction, logistics, agriculture, healthcare, and education sectors led growth throughout the third quarter of the fiscal year and further into 4Q, El Said said. Growth rates in these sectors accelerated y-o-y after the government eased covid-19 restrictions in July, the minister said late last year.

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