Egypt

Our outlook for economic growth has become increasingly pessimistic owing to the ongoing coronavirus pandemic. Real GDP growth is now forecast at 0.4% in the 2019/20 FY, and -4.0% in the 2020/21 FY, compared with our forecast of 5.5% for both fiscal years in pre-coronavirus times. The lower economic growth forecast partly reflects weaker domestic demand as the effects of a semi-shutdown since mid-March, a night curfew and various other restrictive measures take their toll on the economy. Although the slow reopening of the economy in the coming month should support an uptick in activity, the upward trajectory of coronavirus cases, coupled with policy uncertainty, poses a significant risk. On the latter, Egypt is still implementing a night curfew, although it is slowly being shortened, while the economy is gradually reopening in line with a three-phase coronavirus co-existence plan announced by the government in mid-May. On the political front, there has been little opposition to President Abdel Fattah Al-Sisi in the seven years that he has been in power, partly because people fear the harsh consequence of even trivial offences, and partly because he re-stablished order after the chaotic and dangerous year of Muslim Brotherhood rule. But hungry people lose their fear, and the price of order is proving high. There is a latent risk that more open opposition to the president can prove a risk to overall stability. (Source: Egypt Annual Country Profile, published June 2020.)

Macroeconomic Data

(2019)