Egypt: The economy grows at a steady pace in the second quarter of FY 2019
January 16, 2019
According to an announcement by the Ministry of Planning and Administrative Reform on 16 January, GDP increased 5.3% in October–December (Q2 FY 2019) compared to the same three months a year earlier. This matched the growth rate achieved in July–September. Although comprehensive data is not yet available, this latest outturn was driven by increased investment.
On the same day, the Ministry of Planning and Administrative Reform announced that the unemployment rate is expected to have edged down to 9.9% in October–December, down from 10.0% in the previous period. This, coupled with higher public-sector salaries and pensions effective from July, suggests private consumption growth also likely contributed to the headline growth reading.
Looking ahead, the economic outlook appears bright. Although inflation has picked up recently on the back of energy subsidy cuts and higher food prices, it is expected to moderate going forward, easing the financial strain on consumers. In addition, higher salaries and pensions in the public sector will likely continue to support private consumption. Meanwhile, investment should reap further benefits from recent reforms to improve the business environment and higher government investment spending this fiscal year.
Author: Edward Gardner, Economist