Egypt: GDP growth accelerates markedly in Q4 FY 2021
The economy expanded 7.7% year-on-year in the fourth quarter of FY 2021 (April–June), according to estimates released by the Ministry of Planning and Economic Development. The reading, which matched the Central Bank’s estimate published in its monetary policy statement on 16 September, followed the 2.9% increase logged in the third quarter of the fiscal year. It marked the strongest growth rate since at least Q4 FY 2008, although it was supported by a low base effect.
Domestically, fixed investment returned to growth after contracting for six consecutive quarters, skyrocketing 96.4% in annual terms (Q3: -11.3% yoy). However, private consumption growth eased to 1.4% in the period (Q3: +7.7% yoy), and government spending increased at a softer pace of 2.1% in Q4 following the prior quarter’s 5.7% rise.
Meanwhile, the external sector contributed positively to the overall GDP reading, as exports of goods and services bounced back to a 53.7% expansion in Q4 from the 6.3% decline recorded in the previous quarter. Meanwhile, growth in imports of goods and services accelerated to 32.6% in Q4 from the 6.3% expansion clocked in Q3.
Going forward, the recovery should continue in the new fiscal year, although the pace of growth will likely ease in the coming quarters, partly due to the fading base effect. That said, rapidly increasing daily Covid-19 infection rates, coupled with the still-sluggish vaccine rollout, could see restrictions tightened again and potentially drag on activity.