Several non-economic factors have supported growth and made Egypt more resilient to external shocks. First and foremost is the country’s growing population, which rose from 90.2m in FY 2015/16 to 101.5m in FY 2019/20.
The population is expected to expand at a compound annual growth rate of 1.9% through to 2030, according to Fitch Solutions, reaching 120.8m by that year. As the largest in the MENA region, Egypt’s consumer base is a strong incentive for retail investment. The population is also youthful and tech-savvy, with 60% of Egyptians under 30. Young adults aged 20-39, which comprise around one-third of the total, are more likely to buy new consumer goods. These younger generations have contributed to rising demand for devices such as smartphones: this is reflected in the fact that the number of smartphones shipped to Egypt increased by 16.5% in 2019 to 14.9m units, according to the International Data Corporation. This, in turn, has led to greater mobile internet use. Per the Ministry of Communications and Information Technology, the number of mobile internet users stood at 42.3m in January 2020, up 24% on one year earlier.
Economic resilience is supported by high levels of consumer spending relative to the region. Real total household spending grew by an annual average of 6.4% between 2015 and 2019, according to a report by Fitch Solutions in February 2020. At that time the trend was expected to continue, with total household spending growing from an estimated LE2.3trn in 2020 to LE3.4trn in 2024. The research company attributed the rise in spending to the stabilisation of inflation, with the consumer price index easing from 12.7% in January 2019 to 7.2% one year later. The decision to raise minimum wages and pensions in March 2019, and Egypt’s attractive consumer profile – including a growing middle class with more disposable income – also contributed to robust consumer spending prior to the pandemic.
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