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Editor in Chief Mohamed Wadie

Egypt's Inflation Falls to Lowest Level in 14 Yrs 


Thu 08 Oct 2020 | 07:50 PM
Taarek Refaat

Hala El-Said, Minister of Planning and Economic Development said that the inflation rate fell to its lowest level in 14 years to 5.7% in the fiscal year 2019/20, compared to 13.9% year-on-year.

El-Said explained - in a statement on Thursday - that among the positive indicators also witnessed by the Egyptian economy, ahead of the coronavirus outbreak, is the increase in the of government investments with about 23% to reach EGP 113 billion, with a parallel drop in the unemployment rate to 7.7% (January - March 2020), a decline in the non-oil trade deficit by about 24%, and an increase in net foreign direct investment (FDI) flows by 19% ( July - December 2019).

"The Egyptian economy was accelerating at a good pace, ahead of the crises and in accordance with global expectations at 5.8% during FY 2019/20," she indicated.

"As a result of the successful economic reforms implemented by the state in recent years, the growth rate reached about 5.6% in H1 of 2019/20 and about 5% during Q3 of 2019/20 , with an average growth of 5.4% in the first nine months of the year, yet, in light of the crisis, the impact was evident in the Q4," she pointed out, adding that this quarter witnessed a contraction of a number of economic sectors, the most important is the tourism sector, the industry and services sector, with an estimated loss in gross domestic product (GDP) of EGP 206 billion.

The minister pointed out that despite this relative decline, reform, positive indicators, and the persity of the Egyptian economy helped it become more flexible and able to absorb external shocks.

The minister concluded that expectations from international institutions, including the International Monetary Fund (IMF), predicted that Egypt would be able to maintain a positive growth rate of about 2% during 2020.

According to the World Bank, growth declined from 5.6% in FY 2019 to 3.5% in FY 2020, and is projected to decline further to 2.3% in 2021 before rebounding in 2022.