Egypt's Economy to Grow 5% in FY2021/22: Reuters Poll

A Reuters survey on Monday expected Egypt's economy to grow 5% in the fiscal year 2021/22, unchanged from analysts' expectations in a similar poll three months ago and just below the government's target of 5.4%.

The poll showed that the gross domestic product (GDP) of the Arab world third largest economy will hit a growth of 5.5% in the fiscal year ending June 30, 2023.

The government expects that its economy will grow by 2.8% in FY 2020/21 despite the massive drop in the global economy, maintaining its position as one of the few emerging markets to achieve growth despite the pandemic.

The pandemic caused tourism to collapse in March 2020 and other parts of the economy to slow, as Egypt maintained a large trade deficit, which rose 9% to $30.6 billion in July 2020-March 2021 compared to the year prior.

Tourism crashed in March 2020 and other parts of the economy slowed due to the economy, maintaining a large trade deficit that rose by 9% to $30.6 billion from July 2020 to March 2021.

Naeem Brokerage Allen Sandeep said Egypt's high trade deficit is partly due to lower tourism revenues.

"The hope is that non-oil foreign direct investment recovers, local industry and local manufacturing take over, and then you have an alternative to imports," Sandeep added.

Inflation was forecast at 6.0% in the fiscal year ending in June, slightly below expectations of 6.4% in April. The decrease in household consumption also led to a decrease in inflation. According to the survey, inflation has slowed as inventories pile up after the market was choked by supply chain disruptions last year due to the pandemic.

“Now, if we see that the coronavirus is swaying, and tourism is very weak ... there will be a time when we cannot continue to borrow, Egypt is already paying foreign debt investors a huge premium to its central bank rates," he concluded.