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Egypt's Economy Expected to Grow 5% by the end of 2022/23- Minister

Wed 30 Nov 2022 | 07:27 PM
Taarek Refaat

The Minister of Planning Hala El-Saeed reviewed on Wednesday the most important preliminary indicators for the first quarter of the current fiscal year, as the ministry's preliminary data shows that the Egyptian economy continued to achieve a high growth rate during the Q1 of the FY2022/23 at a rate of 4.4% despite the challenges posed by the pandemic, the Russian-Ukrainian crisis, as well as the unfavorable effects of climate change.

The minister added, during today's cabinet meeting chaired by Mostafa Madbouly, that, according to preliminary data, the Egyptian economy is expected to achieve growth of approximately 5% by the end of the current FY2022/23, despite the  Russian-Ukrainian crisis, whose repercussions are likely to extend during next year, according to a press release.

El-Saeed presented the seven sectors that most contributed to the GDP during the Q1, which are: agriculture, wholesale and retail trade, restaurants and hotels, construction, real estate activities and business services, social services, communications and information.

The minister continued: The activity of the Suez Canal has witnessed a growth as a result of the marketing policies pursued by the Authority in attracting new shipping lines, and as a reflection of some global changes that led to an increase in the savings achieved by the Suez Canal compared to alternative routes in light of the high prices of ship rentals and freighters, the rise in oil prices and the change in the trade map.

In terms of the unemployment rate, she explained that it rose slightly to 7.4% during the Q1, compared to 7.2% year-on-year, and the inflation rate is witnessing a rise driven by global inflationary upward trends.

During the meeting, a number of necessary measures were presented to achieve a balance between high growth rates and contain increases in inflation rates while maintaining employment levels, as well as reducing the burden of external debt.

During her presentation, the minister touched on explaining the repercussions of the Russian-Ukrainian crisis on the Egyptian economy, explaining that this war resulted in disruption of international supply chains, which led to a rise in global prices for food and energy, and thus an escalation in global inflation rates and its repercussions on the Egyptian economy.

In this regard, El-Saeed indicated that the crisis caused a rise in global interest rates, and then financial market turmoil and an increase in the cost of financing, which in turn led to higher price levels in various countries around the world, and all of this resulted in a noticeable slowdown in economic growth rates in light of signs of a global recession.

She added: The growth of the global economy slowed from 6% during the year 2021 to 3.2% during the current year, with expectations of a continued decline in growth rates to reach 2.7% during the next year, with a greater decline in the case of developed economies.

The Minister of Planning attributed the decline in the levels of global economic growth to growing fears of the inability of monetary policies to contain inflation, the prevalence of the debt crisis in emerging markets, and the expected decline in production in Europe affected by the shortage of Russian gas supplies, in addition to the exacerbation of the real estate crisis in China.

She continued that a decline in global trade activity is expected during the next two years, as the current year witnessed a sharp decline in global trade growth rates to 4.3%, with a further slowdown expected to 2.5% during the year 2023; affected by the consequences of the Russian-Ukrainian crisis.

During the meeting, Mohamed Maait, Minister of Finance, presented the details of the follow-up of the Egyptian program with the International Monetary Fund (IMF), and the most important targets during the next stage, after the Egyptian authorities reached an agreement with the fund at the expert level at the end of last October.