Economy
From The Report: Egypt 2020
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Following a currency crisis in 2016, Egypt implemented a series of reforms, the results of which are apparent across key macroeconomic indicators. GDP growth rose from 5.3% in FY 2017/18 to 5.6% in FY 2018/19, and unemployment fell to 7.5%. Although Egypt faces the challenges of 2020 from a relatively robust position, lockdown measures and market turbulence have significantly impacted the economy. In April 2020 the Ministry of Finance downgraded its growth forecast for FY 2020/21 from 4.5% to 3.5%, before reducing this further to 2% in May 2020. Nevertheless, this makes Egypt the only Arab economy expected to experience positive GDP growth in 2020 and one of the few countries worldwide not set to enter recession. While the full impact of the pandemic remains to be seen, the country has moved to mitigate the worst effects by boosting government investment, and supporting small businesses and strategic industries that were adversely affected by the crisis. This chapter contains interviews with Mohamed Maait, Minister of Finance; and Ahmed Abd El Wahab, Executive Director, General Authority for Investment and Free Zones.

Articles from this Chapter

Overview

Bridging the gap: Ambitious structural reforms provide strong fundamentals to face the challenges of the Covid-19 pandemic
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Prior to the onset of the global Covid-19 pandemic an ambitious programme of economic reform had succeeded in accelerating Egypt’s growth and reducing its fiscal deficit. The creation of a more business-friendly environment and the streamlining of the country’s bureaucracy has seen Egypt rise steadily in global rankings. This progress has, however, been disrupted by the effects of one of the biggest international economic shocks in decades. Mitigating the impact of the Covid-19 will be…

Interview

Boosting efficiency: Mohamed Maait, Minister of Finance, on reducing debt and continuing to encourage investment
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Interview:Mohamed Maait What are the key economic priorities following completion of the IMF-backed reform programme? MOHAMED MAAIT: The IMF programme was part of a model designed by the Egyptian government, so the reforms began before IMF backing and they will continue after it. Egyptian leadership is committed to economic reforms that will put the country in a sustainable position via three routes: monetary reform, fiscal reform and structural economic reform – which is our top priority…

Interview

Course of action: Mohamed Abdel Wahab, Executive Director, General Authority for Investment and Free Zones (GAFI), on ensuring local industries remain competitive post-Covid-19
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Interview:Mohamed Abdel Wahab To what extent will the global outbreak of Covid-19 affect Egypt’s economic progress? MOHAMED ABDEL WAHAB: In terms of expected growth rates, international trade and the labour market, there will be inevitable change in the global investment map for years to come. However, the economic reform programme that Egypt has implemented since 2016 has created an environment that will help to protect against the most significant repercussions of the crisis. Current…

Analysis

Confidence building: A new investment law and efforts to streamline decision-making support rising foreign investment
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Egypt is working to establish itself as a leading destination for foreign direct investment (FDI). These efforts were spearheaded by the promulgation of a new investment law in 2017, which sought to significantly improve the legal framework for investors. While the impact of the legislation appeared to be muted, FDI inflows rebounded in both 2018 and 2019. While the government is currently focused on measures to offset the impact of the Covid-19 pandemic, efforts are also under way to streamline…

Analysis

Long-term vision: The country’s development strategy provides a guide to its post- Covid-19 economic recovery
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The Egypt Vision 2030 strategy is more of a statement of broad economic intent than a precise roadmap. However, against the backdrop of the global Covid-19 pandemic and with government policy focused on short-term mitigation efforts, the document provides as a useful reminder of the nation’s long-term economic ambitions. Launched in 2016, the strategy aims to create a “competitive, balanced and diversified economy” that supports “innovation and knowledge, social justice, economic…

Analysis

Counting costs: The Covid-19 pandemic is set to reduce remittance flows, but new technologies and increased competition could ease the impact
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The onset of a Covid-19-induced global recession has affected both labour markets and financial flows around the world. At the confluence of these two are remittances, which have increasingly been among the top contributors to GDP in many emerging markets over recent decades. In April 2020 the World Bank predicted that remittances to low- and middle-income countries would see the sharpest decline in recent history in 2020, falling by 19.7% to around $445bn, compared to $554bn in 2019. This…