Egypt Economic Forecast

Egypt Economic Outlook

March 10, 2020

The economy likely kept steady momentum in the second quarter of FY 2020, which ran from October to December, after slowing marginally in the first. Higher government spending, particularly on investment and public wages, likely underpinned activity. However, the unemployment rate climbed to 8.0% in Q2 from 7.8% in Q1, potentially dampening private consumption. On the external front, merchandise export growth remained subdued for the second consecutive quarter in Q2, while imports dropped, contrasting an increase in the previous quarter. Turning to the third quarter, growth likely remains solid. However, the non-oil private sector has lost some steam, with the PMI averaging lower in January–February than in Q2 and the sector’s staff levels dropping at the fastest pace in nearly two-and-a-half years in February. In addition, rising cases of coronavirus both within Egypt and abroad are a concern, particularly due to the potential impact on the tourism sector.

Egypt Economic Growth

Growth should stabilize in FY 2020, after accelerating for the second year running in FY 2019. Particularly, higher government spending, improved ease of doing business and lower interest rates should support activity. However, the coronavirus outbreak, lingering global trade tensions and domestic security scares will weigh on prospects. FocusEconomics panelists project GDP to expand 5.5% in FY 2020, which is down 0.1 percentage points from last month’s forecast, and 5.5% again in FY 2021.

Egypt Economy Data

2014 2015 2016 2017 2018
Population (million)86.789.090.294.897.0
GDP per capita (USD)3,5253,7383,6912,4722,587
GDP (USD bn)306333333234251
Economic Growth (GDP, annual variation in %)2.94.44.34.25.3
Consumption (annual variation in %)-  -  -  -  -  
Investment (annual variation in %)-  -  -  -  -  
Industrial Production (annual variation in %)-4.82.3-0.12.17.2
Unemployment Rate13.012.812.511.89.9
Fiscal Balance (% of GDP)-11.5-11.0-12.0-10.7-9.5
Public Debt (% of GDP)89.393.110310897.3
Money (annual variation in %)17.016.418.639.318.4
Inflation Rate (CPI, annual variation in %, eop)10.111.123.321.912.0
Inflation Rate (CPI, annual variation in %)10.110.413.829.514.4
Policy Interest Rate (%)9.259.2514.7518.7516.75
Exchange Rate (vs USD)7.157.8318.1317.7817.91
Exchange Rate (vs USD, aop)7.087.7110.0917.8417.81
Current Account (% of GDP)-0.9-3.6-6.0-6.1-2.4
Current Account Balance (USD bn)-2.7-12.1-19.8-14.4-6.0
Trade Balance (USD billion)-34.1-39.1-38.7-37.3-37.3
Exports (USD billion)26.122.218.721.725.8
Imports (USD billion)60.261.357.459.063.1
Exports (annual variation in %)-3.4-14.7-15.916.218.9
Imports (annual variation in %)4.31.9-6.42.87.0
International Reserves (USD)16.720.117.631.344.3
External Debt (% of GDP)15.114.416.733.736.9

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Egypt Facts

Value Change Date
Bond Yield13.700.0 %Dec 31
Exchange Rate16.040.0 %Jan 01

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