EBRD expects Egypt’s growth rate to reach 5.5% in 2018/19

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Thu, 01 Nov 2018 - 06:04 GMT

BY

Thu, 01 Nov 2018 - 06:04 GMT

FILE – EBRD

FILE – EBRD

CAIRO - 1 November 2018: Egypt’s economic growth rate is expected to hit 5.5 percent in fiscal year 2018/2019, compared to 5.3 percent in the previous year, according to the European Bank for Reconstruction and Development (EBRD).

“Growth is expected to be supported by a continued boost in confidence, a recovery in tourism, an increase in foreign direct investment and improved competitiveness,” EBRD added.

EBRD said that other positive factors are expected to include a strengthening of exports, the start of natural gas production from the Zohr field, the implementation of business environment reforms and prudent macroeconomic policies.

Generally, EBRD said that economic growth in the southern and eastern Mediterranean will continue to pick up speed this year, with most countries in the region enjoying their best tourism season since 2010.

The bank’s report stated, “the general upturn also reflected improved competitiveness in the wake of currency depreciations in Egypt and Tunisia, combined with the implementation of reforms.”

In both Jordan and Lebanon, the projected growth in 2018 remains below the growth rate of the population, implying a decline in real per capita incomes, the report said.

The report expected growth in Tunisia to pick up in 2019 to 3.0 percent from 2.8 percent in 2018 and 1.9 percent in 2017, supported by a continued recovery in tourism and investment, stronger growth in major export markets in Europe, and the implementation of structural reforms in the run up to the November 2019 election.

“In Morocco, growth is expected to slow down in 2018 to 3.0 percent, influenced by the negative base effect following favorable weather conditions for agriculture in 2017,” it read.

In 2019, growth in Morocco is forecast to rise to 3.5 percent, supported by the continued recovery in tourist arrivals, an increase in foreign direct investment, greater competitiveness from the move to a more flexible exchange rate regime, a rebound in services and manufacturing, stronger export growth and expanded mining capacity.

According to the EBRD, growth in Jordon is expected to rise to 2.2 percent in 2018 and 2.4 percent in 2019, after 2.0 percent in 2017, supported by stronger private consumption from the rising refugee population, foreign investment, and greater certainty and confidence stemming from fiscal consolidation.

As per Lebanon, economic growth is expected to record 1.1 percent in 2018, from 1.5 percent in 2017, and a range between 1.5 and 1.9 percent in 2019.

Egypt’s Minister of Planning Hala el-Saeed said that the Egyptian government targets to achieve a high real gross domestic product (GDP) during the period of 2018-2022, setting 5.8 percent for 2018/2019, to gradually rise to 8 percent and 10 percent in 2029/2030.

Saeed added that high growth rates will be reflected on increased employment opportunities and improved standard of living as well as better services for citizens.

The minister previously referred that the overall economic and administrative reform program initiated by the Egyptian government in 2016 helped the country restore macroeconomic stability, with a growth rate of 5.3 percent at the end of 2017/2018, compared to a growth rate of 2.9 percent in 2014.

Saeed said that Egypt is expected to achieve a growth rate of 7.5 to 8 percent by the end of a four-year plan.

Egypt embarked on a bold economic reform program that included the introduction of taxes, such as the value-added tax (VAT), and cutting energy subsidies, with the aim of trimming the budget deficit.


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