EBRD raises Egypt’s FY 2021-2022 growth outlook
EBRD is more optimistic about Egypt’s growth outlook: Egypt’s economy is on track to grow 4.9% in FY2021-2022, the European Bank for Reconstruction and Development (EBRD) said in its latest Regional Economic Prospects report (pdf) on Thursday. This is an upwards revision of 0.4 percentage points from the bank’s June report, when it said Egypt would record 4.5% growth during the current fiscal year, but is still below the 5.4% the government has penciled in. The IMF and a Reuters poll of analysts also both recently predicted slightly faster growth rates than the EBRD report.
The EBRD’s forecast for the current calendar year is also stronger than it was in June, with the bank revising upwards its expectation to 5.3%, up 1.1 percentage points. Growth is then expected to cool off slightly in 2022 to 5.0% — a downward revision of 0.2 percentage points. Egypt is seen outperforming all of its peers in the Southern and Eastern Mediterranean (SEMED) region, as well as the mean growth for SEMED countries.
What’s underpinning Egypt’s expected growth? A pickup in the telecoms sector, coupled with a rebound in private consumption and investment, as well as recovering foreign direct investment flows, the report suggests.
The usual suspects are also still the biggest risks to our outlook, with the report pointing (again) to a slow vaccination rate and the “weak outlook in the tourism sector in view of a probable global delay in tourism recovery.”
Regional rebound is afoot: The SEMED region — which spans developing countries in the southern and eastern Mediterranean, emerging Europe, and central Asia — is seeing “a rebound of agriculture and telecommunication, as well as some growth in tourism and exports.” The report predicts SEMED economies to grow an average of 4.2% during the current calendar year and accelerate to 4.4% in 2022.