Tuesday, 29 June 2021

EBRD is a bit more optimistic about our growth prospects

Egypt’s economy to grow 4.5% in FY2021-2022, says EBRD in June update: The European Bank for Reconstruction and Development (EBRD) sees economic growth in Egypt slowing down to 2.5% in the state’s ongoing fiscal year, which ends on 1 July, before recovering to 4.5% in FY2021-2022, the bank said in its latest Regional Economic Prospects report. The EBRD’s FY2020-2021 forecast is slightly lower than the 2.8% the Finance Ministry is penciling in for growth during the fiscal year ending this week, but higher than a recent World Bank forecast.

Growth for the 2021 calendar year, meanwhile, is expected to come in at 4.2%, the EBRD said. The bank then expects the economy to grow at a 5.2% clip in 2022, close to what the country achieved before the pandemic hit last year. Egypt has been one of few economies to post positive growth in 2020, in spite of the pandemic, the EBRD said.

The forecast for the 2021 calendar year is on par with the regional average, which measures growth in the EBRD’s Southern and Eastern Mediterranean (SEMED) regional classification. The 5.2% forecast for 2021, however, is higher than the regional mean.

Telecoms to take the lead, employment to buoy consumption, FDI to inch up: Growth in the coming fiscal year will be driven by a “boom in the telecommunications sector,” the EBRD said, adding that lower unemployment rates throughout other areas of the economy will support consumption. FDI and private investment are also expected to recover from pandemic lows.

Threats to the outlook: A slow vaccination rate, weak recovery prospects for tourism as the sector faces potential global headwinds, and the “slowing momentum of major projects implemented in different parts of the country” were cited as key risks to the growth outlook.

Better prospects for emerging markets: The EBRD raised to 4.2% its 2021 forecast for growth in the SEMED region — which spans developing countries in the southern and eastern Mediterranean, emerging Europe, and central Asia, up from an earlier forecast of 3.6% the bank made in September.

Read the report: Tap / click here to download the full report (pdf), or here for a press release on the major findings.

CATCH UP QUICK:

  • Businessman Hassan Rateb was arrested for allegedly funding illegal excavations of antiques, according to Al Ahram. Rateb was reportedly accused of funding MP Alaa Hassanein’s alleged illegal excavations. Hassanein had been arrested earlier this month for smuggling antiquities. Rateb was the former chairman of El Mehwar TV channel and Chairman of Sinai University, Sama Group, and Sinai Cement Company among other companies.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2021 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; and Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Abu Auf (tax ID: 584-628-846), the leading health foodmaker in Egypt and the region.