A few days ago, the International Monetary Fund raised its estimates for the growth of the Egyptian economy during 2021, while lowering its estimates for the growth of the global economy.
In the latest World Economic Outlook report issued at the fall meetings of the International Monetary Fund today, the Fund expected the growth of Egypt’s GDP in 2021 at 3.3%, up from the fund’s previous forecast of 2.5% last April, according to the Middle East News Agency.
The report also expected an increase in GDP growth rates in Egypt during 2022 to reach 5.2%, and then 5.8% in 2026.
And last June, World Bank reports came to praise the Egyptian government’s adoption of more reform steps during 2021 to address the repercussions of the Corona pandemic. At that time, the Bank expected in its June World Economic Outlook report that the Egyptian economy would grow during 2022 and 2023, recording 4.5% and 5.5%, respectively.
This is in line with the “World Investment 2021” report issued by the United Nations Conference on Trade and Development (UNCTAD), which revealed that Egypt still maintains its lead in receiving foreign direct investment in the continent during the year 2020 by $5.9bn. This is despite the decline caused by the Corona pandemic in the number of inward investments to the continent.
This came despite the International Monetary Fund’s lowering of its estimates of global economic growth to 5.9% during 2021, which is about 0.1 percentage points lower than its expectations included in the World Economic Prospects Report for 2021 issued last July. The recovery of the global economy continues, but its previous momentum has weakened, and the level of uncertainty has risen, at a time when the pandemic is witnessing a new wave of infection.
There is no doubt that the cracks and negative effects caused by the Coronavirus will last for a longer period, and it is expected that short-term manifestations of divergence will leave lasting imprints on medium-term performance. And expectations indicate that the global economy will achieve growth of 5.9% in 2021 and 4.9% in 2022. That’s 0.1 percentage point lower in 2021 than the July 2021 expectations.
The downgrading of the 2021 estimate reflects the reduction related to advanced economies, due in part to disruptions in supply chains. This also applies to the reduction related to low-income developing countries, which is mostly due to the exacerbation of the pandemic. This is the reality of the situation in which the world is trying to wake up from the repercussions of “Corona”, so what Egypt is currently experiencing is part of a global problem that all countries are exposed to. We are not an exception despite the limited impact of the pandemic on us.
Dr Hatem Sadek is a Professor at Helwan University.