Egypt's economic losses limited as result of avoiding complete curfew, applying stimulus packages

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Tue, 04 May 2021 - 03:27 GMT

Ministry of Planning – Youtube

Ministry of Planning – Youtube

CAIRO – 4 May 2021: Volume of the disturbances resulting from the Corona pandemic among the economies in the region is different from one country to another, Ministry of Planning stated Tuesday, indicating that the percentage of losses in Egypt was relatively limited as a result of avoiding a complete curfew and investing in a huge stimulus package.

 

This came in a statement by the Ministry of Planning today its participation in preparing the chapter on the Middle East and North Africa in the Global Food Policy Report 2021, which is issued by the International Food Policy Research Institute (IFPRI) and deals with the effects of the Corona virus on agricultural food systems and household incomes in Egypt, Jordan and Sudan.

 

According to the results of the report, the agri-food systems showed relative flexibility in the Middle East, where the percentage of decline in agricultural food output ranged between 3-9 percent in Egypt, Yemen and Sudan, and reached about 38 percent in Jordan, and agriculture was one of the least affected sectors in Egypt and Sudan.

 

The report indicated that some value chains have enjoyed a significant increase in demand, such as medicinal and aromatic plants, supported by increased demand for exports, and that the agri-food system represents a strong basis for recovery and transformation after the Corona pandemic due to its relative resilience.

 

The report pointed out that some economies and sectors are recovering at a faster rate based on the national policies adopted, as the stimulus package that reached 100 billion in Egypt is estimated to have limited the decline in GDP (in the period from April to June 2020) from 8.7 percent to 1.1 percent only, where the stimulus package supported the most affected sectors, including export, tourism and real estate, in addition to the government easing credit restrictions for companies, providing tax incentives and expanding cash transfer programs.

 

It referred to the investment plan that Egypt is implementing now at a value of LE 280 billion, which led to an improvement in economic performance in the second half of 2020.

 

The report indicated that the demand for digital tools has increased dramatically during the pandemic, and according to recent studies, those sectors that have been digitally transformed, such as food delivery, are less affected by the crisis. The pandemic has provided an opportunity to accelerate the digitization process and increase private and public investments, with a focus on promoting digital inclusion of low-skilled people, and illiterate people in the area.

 

It stated that the Corona pandemic represents an opportunity for countries to rearrange agricultural investment priorities to include climate, nutrition and environmental aspects, while diversifying food imports and exports and improving the business climate for farmers, food processors and traders to achieve prosperity and growth.

 

Deputy Minister of Planning and Economic Development Ahmed Kamali pointed out that informal employment has been targeted and policies developed to support it in light of the pandemic, and at the sectoral level, the tourism and industry sectors have been targeted and supported, and solutions based on information and communication technology are being targeted because they are necessary to mitigate the negative effects of the pandemic, in addition to that financial support has been provided to help companies cover their operating expenses and thus prevent bankruptcies.

 

Kamali explained that due to the presence of some opportunities generated by the crisis, work is now underway to reform the business climate and increase the productivity of supply chains in Egypt to be more competitive after the pandemic, pointing out that the Corona pandemic highlighted that while social protection is the key to help the poor; Poverty is only a symptom of the root problem, the need to create decent jobs.

 

Agri-food systems play an important role in stabilizing the Middle East region and supporting the post-pandemic economic recovery, but their greater role will depend on the extent of success in containing the virus in the region and the world, the government investments implemented, as well as the prevailing policies and the political and commercial situation. “Smart, future-oriented public investment will be essential to support and raise the potential of the agri-food system in the post-COVID-19 and long-term transformation of economies.”

 

The ongoing cooperation between the Ministry of Planning and Economic Development and IFPRI to enhance evidence-based policy making, as cooperation was made in issuing a policy note on the impact of the Corona crisis on the Egyptian economy during the fourth quarter of the fiscal year 2019/2020, that is, the period of partial curfew in Egypt.

 

They also cooperated in the issuance of a policy paper entitled “From reopening to recovery: alternative pathways and the impact on sectors, jobs and households” to assess the impact of the gradual cancellation of precautionary measures and measures related to the Coronavirus on the Egyptian economy during the first half of the fiscal year 2020-2021, and presenting projections about Economic growth in light of a number of alternative scenarios that differ in terms of the speed of easing precautionary measures and government support.

 

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