São Paulo – This month saw the World Bank revise up its 2020 Gross Domestic Product (GDP) growth forecast for Egypt, to 3.5% from a 2% estimate released last April, Al Ahram reported. The updated rate still falls short of the 5.6% registered last year.
The World Bank said the new forecast works with a scenario where the pandemic should persist through early 2021, and therefore spanning two fiscal years. The brunt of the damage is expected to come in the 2021 fiscal year. The prediction for next year is 2.3% growth, with a rebound likely to take place in 2022.
The bank’s latest report points out that Covid-19 is “undermining external income sources, disrupting fiscal consolidation” and leading to unemployment. Some 2.7 million jobs have been lost in Egypt this year, primarily in retail and wholesale, tourism, manufacturing, tourism, transport and construction.
According to the World Bank, activity slowed since social distancing measures were put in place and air traffic was suspended. The country rolled out an EGP 100 billion emergency package tantamount to 1.7% of GDP. This led to increased healthcare and social protection spending, including cash aid to informal workers and the extension of existing cash transfer programs.
Government debt is expected to go from 90.2% of GDP in late 2019 to 93.8% at the end of this year. However, one-off cancellation of government debt towards the Social Insurance Fund (SIF) should bring down debt to 87.4% of GDP.
Translated by Gabriel Pomerancblum
