Egypt’s Minister of International Cooperation Rania Al-Mashat said continued positive international reports suggesting the growth and cohesion of the country’s economy reflect the effectiveness of the government’s economic reform programme.
The reforms, implemented between 2016 and 2019, illustrate the ability of the various national and infrastructure projects to enhance the economy’s cohesion, despite the novel coronavirus (COVID-19) pandemic. This comes at a time when most of the region’s economies have contracted due to the pandemic.
In a press statement on Tuesday, the Minister of International Cooperation pointed out that the World Bank Group (WBG) has maintained its projections that the Egyptian economy will experience positive growth.
The international organisation’s projections were outlined in its report, “Trading Together — Reviving Middle East and North Africa Regional Integration in the Post-COVID Era”. The report confirms that the economy has succeeded in absorbing the repercussions of the global epidemic, thanks to the measures implemented by the government over the past four years.
In its report, the WBG expects Egypt’s gross domestic product (GDP) to grow by 3.5% in fiscal year (FY) 2020/21, 2.3% in FY 2021/22, and 5.8% in FY 2022/23.
Minister Al-Mashat said that the report reviewed the measures taken by the state in its emergency plan to respond to the pandemic, including the allocation of EGP100bn, or 1.7% of GDP, to economic protection.
The significant financing has contributed to doubling social protection programmes and integrating informal employment through cash transfer programmes. It came in addition to the Central Bank of Egypt (CBE) and Ministry of Finance measures to postpone the loan payments of individual and corporate customers.
The Egyptian authorities have also encouraged greater financial inclusion and remote banking services, in addition to reducing interest by 300 basis points to encourage borrowing and reduce debt burdens. Additional steps have been put in place to provide financial support programmes for companies affected by the pandemic, especially in the tourism sector, which has been one of the most affected sectors during the pandemic.
The report praised the Egyptian government’s ability to provide funds from the international market to support the country’s pandemic response plan. Earlier this year, Egypt and the International Monetary Fund (IMF) signed a credit readiness agreement worth $5.2bn.
Egypt also received urgent financing of $2.8bn, in addition to offering international bonds worth $5bn in May, despite fluctuations in global markets
Earlier, the European Bank for Reconstruction and Development (EBRD) issued a report in which it said that Egypt is the only country in which it operates that will achieve positive growth during 2020. The bank expects that Egypt will see economic growth of 2% this year, rising to 5% in 2021.