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.
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