GDP in Egypt
Egypt - GDP
The economy is back on its feet, growth increases in January-March period
GDP increased 3.9% year-on-year in the January-March period (which is Q1 of calendar year 2017 and Q3 of Egypt’s 2017 fiscal year) according to the Ministry of Planning, up from the 3.8% expansion in the October-December period and higher than 3.7% increase the same quarter of the previous year.
Although comprehensive data has yet to be released, the slight improvement was likely underpinned by greater investment, as foreign investors venture back to the country following the swift implementation of reform measures as part of the IMF’s financial assistance program. Renewed confidence in the economy is evidenced by a significant increase in the Central Bank’s international reserves in recent months. However, Egyptian households are taking a hit due to skyrocketing inflation as a result of the currency depreciation and fuel subsidy cuts, meaning private consumption likely remains depressed. Public spending is also likely to be subdued, as the government takes a prudent fiscal approach in order to reduce the budget deficit in line with the objective set out in the 2017 budget.
The external sector has seen a dramatic turnaround since the start of the year, with a surge in exports in Q1 as firms reap the rewards of a substantial jump in price competiveness thanks to the weaker pound. At the same time, imports have plummeted, as firms and consumers switch to domestic alternatives, with the overall trade deficit narrowing markedly compared to the same period of the previous year. In addition, after taking a severe battering due to a spate of terrorist attacks and political insecurity in recent years, the tourism sector finally showed signs of life in the first quarter. Tourist arrivals were up in Q1, thanks in large part to the lifting of travel bans by most European countries and concerted promotional campaigns.
Looking ahead, the country’s economic panorama is increasingly positive. The implementation of measures announced in the 2017 budget should pare back the fiscal deficit and put public debt on a sustainable path, which together with a predicted decline in inflation and continuing IMF support should increase macroeconomic stability and be conducive to investment. The recent approval of a new investment law to cut red tape and improve the ease of doing business should further boost investment and exports. However, private consumption growth will remain paltry as consumers continue to weather the storm of elevated inflation, while government spending will remained constrained by fiscal consolidation measures.
FocusEconomics Consensus Forecast panelists expect the economy to expand 3.1% in fiscal year 2017, which is unchanged from last month’s forecast. For fiscal year 2018, the panel sees economic growth at 3.9%.
Egypt - GDP Data
|Economic Growth (GDP, annual variation in %)||2.2||2.0||2.2||4.4||4.3|
5 years of economic forecasts for more than 30 economic indicators.
Egypt GDP Chart
Source: Ministry of Planning.
|Bond Yield||17.10||0.0 %||Aug 16|
|Exchange Rate||17.78||0.17 %||Aug 16|
|Stock Market||1,199||0.46 %||Aug 16|
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August 3, 2017
The Emirates NBD Egypt Purchasing Managers’ Index (PMI) rose from 47.2 in June to 48.6 in July, edging closer to the 50-point threshold that separates contraction from expansion in the non-oil producing private sector.
July 26, 2017
In June, urban consumer prices rose 0.82% from the previous month, dropping significantly from May’s 1.67% and marking the lowest rate since July 2016.
July 6, 2017
At its 6 July monetary policy meeting, the Central Bank of Egypt (CBE) significantly increased interest rates across the board for the second consecutive meeting, in an attempt to keep a lid on prices which have soared since the pound was floated last November.
July 4, 2017
The Emirates NBD Egypt Purchasing Managers’ Index (PMI) inched down from 47.3 in May to 47.2 in June.
June 8, 2017
In May, urban consumer prices rose 1.67% from the previous month, down marginally from April’s 1.69%.