World Bank: Egypt's Growth Hits 5.5% in CFY, 6% in 2020

The World Bank forecast that the growth of the Egyptian economy will touch 5.5 percent in the current fiscal year, expanding to 5.8 percent in the next fiscal year 2019-20, and reaching 6 percent in 2020/21.

"Egypt’s economic growth has been robust, averaging 5.3 percent in FY2017/18; a rate that was sustained through Q1-FY2018/19, driven by an expansion in the gas extractives, tourism, manufacturing, construction and ICT sectors. Private investment is picking up and net exports are improving," WB reported.

This came within the World Bank’s June 2019 Global Economic Prospects: Heightened Tensions, Subdued Investment report.

The report praised the decline of inflation in Egypt from 30 percent in 2017 to 13 percent in the current period. "The decline helped the Central Bank of Egypt (CBE) to reduce interest rates last February," the report indicated.

Meantime, the bank predicted growth in oil importing countries from the Middle East and North Africa (MENA), supported by progress in reform policies, and recovery of the tourism sector.

In addition, entrepreneurship support programs along with structural reforms will be the main driver of growth in North African countries like Egypt.

However, the growth rate in the Middle East will continue to be flat this year at 1.3 percent due to a drop in economic activity in oil-exporting countries and weak production as well as the impacts of the US sanctions on Iran.

Oil production cuts in the Organization of the Petroleum Exporting Countries (OPEC) have weakened growth in the Gulf Cooperation Council (GCC) economies. However non-oil sector activities are recovering due to Quantitative easing policies, which lead to an increase in government spending, encouraging lending and investment.

The growth rate in the MENA region is expected to increase to 3.2 percent in 2020, supported by the growth of oil-exporting countries, while remaining stable in the rest of the region.

The World Bank announced in its report that the rate of growth in oil-exporting countries will recover to 2.9 percent in 2020, backed by high growth rates in Iraq and the increase of oil production.

Infrastructure investments along with the facilitation of financing conditions would support the growth of the GCC economies by 2020.