Thursday , April 15 2021

Capital Economics expects the Egyptian economy to grow to 5.8-6% in 2019-2020



Credit Economics, Capital Economics, said Egypt could record one more year of gross domestic product (GDP) growth.

GDP growth is expected to grow from 5.5% this year to 5.8% in the 2019-2020 financial year, as demand supports slowing austerity and boosting the labor market, the agency said in a report Wednesday.

The organization believes that inflation will fall sharply over the next two years and therefore the central bank's looping cycle is likely to be higher than most expectations.

Egyptian economy has risen sharply over the last two years, according to the agency, considering that "there is still a production gap of 2.0-2.5% of potential GDP".

"As a result, as demand grows, the economy must be able to record rapid growth over the next two years without causing inflationary pressures," he added.

Egypt has seen GDP growth of only 5% on an annual basis since the beginning of 2017, which the organization considered to be stronger than the 2011-2016 performance and a higher rate of potential GDP growth, ie all employment and capital Expected be about 4.5%.

One of the main reasons why the economy was able to score higher than expected growth was that it requested the use of untapped resources.

The weak growth that followed the revolutions in 2011 and 2013 was mainly due to a decline in demand that caused workers to be laid off or a reduction in working hours while capacity in the industrial sector was disrupted and, as demand was strengthened, these resources were re-used.

The agency has highlighted hotel occupancy rates, which show the presence of unused energy in the tourism sector.


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