The International Monetary Fund (IMF) raised its growth forecast for Egypt’s economy to 2.8% in the current fiscal year (FY) 2020/21, despite the coronavirus pandemic. IMF expectations echoed the World Bank’s forecast that Egyptian economy will grow 2.7% in FY 2020/21.
Egyptian economy was heavily effected by the coronavirus pandemic, which took it’s toll on tourism, and worker remittances.
Egypt’s tourism revenues in 2020 slumped 70% year-on-year (y-o-y) to record $4bn due to COVID-19 pandemic, down from $13.03bn in 2019
“The growth impact of the COVID-19 crisis has so far been less severe than expected, as strong consumption helped offset weak tourism and investment,” the IMF said in the first review of Egypt’s latest stand-by arrangement.
The fund said Egyptian authorities noted some flexibility in reallocating spending to support more vulnerable sectors and groups during the second wave of the COVID-19 pandemic.
“The still-high level of public debt and gross financing needs also leave Egypt’s economy vulnerable to a reversal of capital flows, which risk triggering again financing and exchange rate pressures,” the IMF said.
At the end of 2020, Egypt’s Prime Minister Mostafa Madbouly confirmed that the Egyptian government has faced many challenges during COVID-19 crisis, and was able to make achievements by adopting a proactive methodology in dealing with the pandemic and limiting its health, social and economic repercussions.
The emergency financial package for the Egyptian economy, which President Abdel Fattah Al-Sisi had ordered, amounting to EGP 100bn, equivalent to 2% of the gross domestic product (GDP), has been spent efficiently, according to Madbouly.