Fitch: Egypt's Consumer Outlook, Household Spending "Outlier" Despite COVID

Fitch solutions said in its Consumer & Retails outlook on the Middle East and North Africa region (MENA) MENA that Egypt's household spending remains strong despite slow vaccination drive.

"We forecast real household spending in Egypt to post growth of 7.2% in 2021, in line with the estimated growth of 7.5% over 2020," Fitch's report added.

"With continued growth in the country's consumer and retail sector, Egypt is both a regional and a global outlier, with real household spending in most markets adversely impacted by the COVID-19 pandemic."

According to the statement, the agency praised Egypt's household spending, when compared regionally and globally as it achived strong performance during the coronavirus pandemic in a case described by the agency as a rare occurrence; especially since the real spending of households in the majority of global markets was negatively affected as a result of the pandemic, despite their fast vaccine path, which is moving at rates much faster than the Egyptian ones.

According to estimates, household consumer spending during 2021 increased by 15% from its pre-pandemic level during 2019, and it is expected to increase by 21% during 2022 compared to 2019.

In the report, Fitch indicated that the strong performance of the consumer sector in Egypt is due to some implemented government policies related to supporting groups most affected by the pandemic, in addition to the flow of remittances from workers abroad, relative control of inflation and an expansionary monetary policy that supports purchasing power for households.

Today, Prime Minister Mostafa Madbouly reviewed the report prepared by the Cabinet's Information and Decision Support Center (IDSC), which monitored Fitch Solutions outlook, issued in August, about growth prospects in MENA.

Prime Minister Assistant & IDSC Chairman Osama Elgohary said on Tuesday that Fitch Agency praised the positive performance of the consumer and retail sectors in Egypt.

Elgohary added that the agency indicated that the recovery of this sector in particular takes 2-3 years; while in the Egyptian case, it witnessed resilience during the pandemic's outbreak, and strong performance during the pandemic.