Egypt maintained its GDP growth rate at 3.6% during the last fiscal year (FY) 2019/20, despite the economic challenges presented by the novel coronavirus (COVID-19) pandemic, according to Minister of Finance Mohamed Maait.
In a Sunday statement, Maait said that Egypt was able to reduce its deficit–to-GDP ratio to 7.9% in FY 2019/20, compared to the 8.2% recorded in FY 2018/19. The country also achieved a primary surplus of 1.8% at the end of June 2020, despite the negative repercussions of the coronavirus pandemic.
The minister’s remarks came during his participation in three video conference meetings, in which he met separately with leaders from HSBC, Standard Chartered Bank, and several foreign investors. The virtual meetings were organised by Bank of America during the International Monetary Fund’s (IMF) fall meetings.
Egypt was also able to reduce its debt-to-GDP ratio to 87% at the end of June 2020, compared to the 90.4% recorded in June 2019 and 108% in June 2017, Maait said. At the same time, the unemployment rate did not exceed the FY 2017/18 level, despite the effects of the global pandemic, where it reached 9.6% at the end of June 2020.
He pointed to the stability of basic commodity prices, and the record level of inflation of 4.2% achieved in June 2020, compared to 8% in June 2019.
International institutions, particularly the World Bank, the IMF, and the European Bank for Reconstruction and Development (EBRD), have praised the Egyptian economy’s resilience in facing the pandemic’s negative economic repercussions.
Maait added that the government’s priorities are to stimulate investments in the transport, natural gas, petroleum, and renewable energy sectors, as well as in industry. The government is also looking to encourage exports, support medium, small and micro enterprises (MSMEs). This comes in addition to its keenness to maximise the private sector’s role in development, in a way that contributes to providing new job opportunities and reducing unemployment.
Meanwhile, Maait announced the launch of the second phase of the national project to build and operate 1,000 language schools in partnership with the private sector, the minister said.
Maait said that Egypt is the only country in the Middle East and Africa (MEA) region that has preserved the confidence of all three global evaluation institutions, namely Standard & Poor’s, Moody’s and Fitch. This has taken place during one of the most difficult periods in the global economy, brought on by the coronavirus pandemic.
The Egyptian economy is unique in the region for having retained the confidence of regional investors, as the country’s stable sovereign evaluation and credit rating have been confirmed. The minister said that this has been an important achievement for Egypt, ensuring that the trust of international financial institutions and the international investment community is maintained.
Ahmed Kochouk, Deputy Finance Minister for Fiscal Policies, said that Egypt’s strategy of public debt management is based on the diversification of financing sources, extending the tenure of the debt, and reducing its burdens.
He also said that the green bonds offered by Egypt have witnessed a large turnout from foreign investors, in both the primary and secondary markets.
At the end of September, Egypt sold $750m worth of five-year green bonds at a yield of 5.250% in the first issuance of government green bonds in the Middle East and North Africa (MENA) region. Last Thursday, the Ministry of Finance announced the listing of these bonds on the London Stock Exchange (LSE).