Economy
From The Report: Egypt 2019
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Since the election of President Abdel Fattah El Sisi in 2014, Egypt’s economic policy has been centred on reducing public sector costs and boosting private sector growth. Five years after Egypt began to implement a comprehensive reform of its economy, the nation’s macroeco-nomic indicators are showing sustained improvement. However, while accelerating growth and a narrowing fiscal deficit have vindicated the government’s auster¬ity measures, a high inflation environment continues to place pressure on the budgets of ordinary households. Looking ahead, the IMF estimates that GDP will grow by 5.5% in 2019 and 5.9% in 2020, powered mainly by a recovery in tourism and rising natural gas output. While the macroeconomic outlook is positive, the challenge of maintaining the support of a population that has yet to feel the benefits of economic reform remains. This chapter contains interviews with Sahar Nasr, Minister of Investment and International Cooperation; and Tarek Tawfik, President, American Chamber of Commerce in Egypt.

Articles from this Chapter

Overview

Prime position: Although inflation remains a key concern, the country is seeing the benefits of extensive structural reform
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Five years after Egypt began to implement a comprehensive reform of its economy, the nation’s macroeconomic indicators are showing sustained improvement. However, while accelerating growth and a narrowing fiscal deficit have vindicated the government’s austerity measures, a high inflation environment continues to place pressure on the budgets of ordinary households. Passing on the benefits of the reformed economy to ordinary Egyptians has therefore emerged as a key challenge for the government…

Analysis

Supporting the base: Private, formalised small businesses serve as the backbone of the economy and the workforce
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Since the election of President Abdel Fattah El Sisi in 2014, Egypt’s economic policy has been centred on reducing public sector costs and boosting private sector growth. Five years later, the issue of revitalising private enterprise remains prominent. In a 2018 assessment of the challenges and opportunities facing the country, the IMF highlighted the need for private entities to provide additional employment opportunities for the estimated 3.5m young Egyptians entering the labour force…

Interview

In the zone: Sahar Nasr, Minister of Investment and International Cooperation, on enhancing the investment climate
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Interview:Sahar Nasr How are recent economic reforms attracting foreign direct investment across sectors? SAHAR NASR: Egypt has undertaken economic and institutional reform programmes in order to boost growth and encourage investment, which will in turn lead to job creation. The New Investment Law of 2017 provides the guarantees and assurances necessary for the private sector and foreign investors to come and invest. By introducing a number of tax incentives at the same time, we want to ensure…

Interview

Business-friendly reform: Tarek Tawfik, President, American Chamber of Commerce in Egypt, on reaping the many dividends of reform
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Interview:Tarek Tawfik How has the private sector adjusted to the economic reforms undertaken in 2016? TAREK TAWFIK: These long-awaited reforms have been instrumental in setting a new trajectory for the country. They came as a sudden shock, particularly during the currency devaluation, but those companies that adjusted their business models have really benefitted. Those that continued to operate in the traditional manner by focusing on importation have struggled, but this was not a sustainable…

Analysis

Moving forward: After shifting development financing strategies, the nation’s sovereign wealth fund is backed and ready
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In March 2019 Prime Minister Mostafa Madbouly issued a set of regulations to govern Egypt’s new sovereign wealth fund (SWF), a LE200bn ($11.2bn) pool of assets wholly owned by the Egyptian government, created as a tool to contribute to the nation’s sustainable economic development. Its formulation has been a slow process. Although plans for the SWF were first approved in 2015, it spent the following years being worked on by the Ministry of Planning, before it was nodded through Parliament…

Analysis

Increased reserves and supportive fiscal reforms are reducing: the budget deficit and fostering expansion Secure environment
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The IMF, in a report issued in November 2018, forecast GDP would expand by approximately 5.3% in FY 2018/19, increasing over the 4.2% expansion seen a year earlier and marking the highest rate of annual growth since 2008. This was supported by figures released by the Central Bank of Egypt (CBE), which put year-on-year GDP growth at around 5.3% in the first half of the year, driven by strong performances in extractive industries (9%), manufacturing (4.2%), wholesale retail and trade (4.2%),…