Egypt Economy to Sustain Growth at 5.2 in 2019: UN Report

By Nawal Sayed

CAIRO, Jan. 22 (SEE) - A recovery in domestic

demand, particularly private consumption, is forecast to sustain Egypt's

economic growth at 5.2 percent in 2019, according to the United Nations World

Economic Situation and Prospects (WESP) 2019, which was released on Monday.

For 2019, the monetary policy stances are

expected to be neutral to tightening in North Africa, including Egypt,

following the trend of the United States and the euro area, the 224-page report

estimates.

While the report notes that external demand

that drove the Egypt economy's growth rate to 5.8 percent in 2018, is forecast

to stay mostly favorable, it also warns that structural vulnerabilities,

including weak fiscal and balance of payment positions, are projected to weigh

on growth prospects.

Beyond Egypt, the North Africa region is estimated

to have grown by 3.7 percent in 2018.

The recent economic expansion reflects

improving external conditions with higher commodity prices and strong growth in

European economies, the largest export destination. The economic growth of

North Africa is forecast to moderate slightly to 3.4 percent in 2019 and 3.5

percent in 2020.

While noting that in 2018, balance of payment constraints

on Egypt and Libya eased, which resulted in declining inflation rates and

policy space to support domestic demand, the report sends alarm bills across

the region, that political instability and social unrest also remain a downside

risk factor in North Africa.

Meanwhile, the global economy will continue to

grow at a steady pace of around 3 percent in 2019 and 2020 amid signs that

global growth has peaked. However, a worrisome combination of development

challenges could further undermine growth, according to the report.

UN Secretary-General António Guterres cautioned

“While global economic indicators remain largely favourable, they do not tell

the whole story.” He said the World Economic Situation and Prospects 2019

“raises concerns over the sustainability of global economic growth in the face

of rising financial, social and environmental challenges.”