The Economy of Egypt: 2020 Update

The year 2020 has been bad and worse for many nations in terms of economy and health. As countries worldwide battled the pandemic through various measures, they were compelled to enter the state of recession due to lockdown, market crash, unemployment rise, and increased mortality rates. However, one state that faired positively even amidst the worldwide pandemic is Egypt; the nation’s economy is expected to be the only in the Middle East North Africa (MENA) region to witness positive GDP growth in 2020. Egypt is likely to register its name among the few countries that did not enter the state of recession amid the global economic fallout during the COVID-19 pandemic.

The report highlighting Egypt’s stronghold on its economy was released by the Oxford Business Group (OBG) in partnership with Commercial International Bank (CIB), the largest private sector bank in Egypt. As per the report’s data, the Egyptian government has been introducing and adopting cultural reforms in its working that are backed by the loan from IMF, approximately amounting to $12 billion, released in installments of five sections. An additional aid of $1.67 billion was also sent to Egypt in response to the COVID crisis.

How Did Egypt’s Economy Deflect the Corona Blow?

In truth, Egypt did face the blow of economic crisis and GDP decline during the pandemic. However, along with such problems came new opportunities as well. The rise of digital banking, e-commerce businesses, and the shift of manufacturing hub from China were a few to count. In the banking sector, the lowering of interest rates on loans is expected to improve the lending environment.

Even before when the pandemic hit the world, Egypt had been performing brilliantly on the economic front. While the nation’s GDP forecast has downgraded from 4.5% to 3.5% for the financial year 2020-21, the country still represents one of the highest growth rates in the world for 2020. The Finance Minister of Egypt, Mohamed Maait, mentioned that the country’s economy is set to continue on its positive growth path for the next two fiscal years, with the economy likely to boost between 2.8% and 4%. Even the forecasted increase is nearly between 5.5% and 6.5% for the next fiscal year (2021-22).

The aviation and transportation sectors were heavily impacted by the Coronavirus. Hence, Egypt prioritized the private sector’s participation in development projects ongoing in the nation. The minister also said that there would be increased participation and cooperation with the Transport Ministry in order to implement all of the ongoing and future-planned projects in collaboration with the private sector.

Egypt’s Economy Before the Corona Virus

Before the breakout of COVID-19, Egypt was faring well in its economy and topped the market by containing the inflation rate in the current year (the data is as published by the Egyptian cabinet); all of this while the world was grappling with the health crisis. Even as per IMF data, Egypt achieved the largest annual decline in its inflation rate as an emerging market in 2020, compared to the last year, calculating the decline of 8.2%. The effects of economic reform rates made the inflation rates drop lower than expected: 5.7% in the fiscal year 2019-2020, compared to 13.9% during the year 2018-2019.

Additionally, the unemployment figures also pointed toward the economic development of Egypt. Recent data published by the Egyptian Central Agency for Public Mobilization and Statistics (CAPMAS) displayed that the unemployment rate has declined to 7.3% in the third quarter of 2020 compared to 7.8% in the last year. Egypt’s monetary resources reserves increased to a whopping $39.22 billion by the end of October 2019, as per the information made public by the country’s central bank. As per IMF, Egypt’s economic performance exceeded all its expectations for the year 2020 when the predicted route was to register a steep downfall due to the unprecedented arrival of the Coronavirus.

How Are the Other Middle Eastern Nations Coping Up?

Mostly, other Gulf countries are also doing well compared to the rest of the world, owing to their oil dependency. While the states like Dubai and Abu Dhabi experienced a severe blow due to a decline in travel, they are still running average economical based on their advanced industry and public sector.

On the other hand, Saudi Arabia witnessed a huge downfall in its economy in the third quarter of 2020 due to the coronavirus-related lockdown.

Ritika
An Engineer by education, and a writer by profession, Ritika lives her life in stories. Her never-ending love for narratives encouraged her to turn her passion into a profession. In more than 4 years of working as a content writer, she has contributed to building content for a reputed technology magazine and a few start-ups.

Latest articles

spot_imgspot_img

Related articles

Leave a reply

Please enter your comment!
Please enter your name here

spot_imgspot_img