Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Egypt economy forecast to grow 5.1% in year to June, 5.5% in 2022/23: Reuters poll

Published 10/21/2021, 03:32 AM
Updated 10/21/2021, 03:35 AM
© Reuters. People walk through an alley of souvenir shops at a tourist market, amid the coronavirus disease (COVID-19) pandemic in Luxor, Egypt April 9, 2021.  REUTERS/Amr Abdallah Dalsh

© Reuters. People walk through an alley of souvenir shops at a tourist market, amid the coronavirus disease (COVID-19) pandemic in Luxor, Egypt April 9, 2021. REUTERS/Amr Abdallah Dalsh

By Patrick Werr

CAIRO (Reuters) - Egypt's economy will grow 5.1% in the fiscal year that ends in June 2022, but accelerate to 5.5% in each of the following two years as tourism continues to rebound and the effects of the coronavirus pandemic wane, a Reuters poll showed.

The central bank said last month economic growth surged to 7.7% in the final quarter of the last fiscal year, indicating growth of 3.3% for the entirety of 2020/21, up from a previous full fiscal-year estimate of 2.8%.

Economists in a July poll predicted economic growth would be 5.0% for the year to next June.

"We expect consumption growth to pick up from a low base post-COVID and public investment to remain strong this year," Allen Sandeep of Naeem Brokerage said.

"What will be critical to see is if this growth is sustained in 2022/23, by when the pandemic effects should hopefully subside substantially."

Tourism has been gradually recovering from COVID travel restrictions put in place in March 2020.

Tourism revenue plummeted to $4.9 billion in 2020/21 from $9.9 billion a year earlier. But in the April to June quarter it bounced back to $1.75 billion from a low of $305 million in the same quarter of 2020, according to central bank data.

In the latest Reuters poll, economists expected annual urban consumer price inflation to climb to 6.0% in 2021/22, then picking up even further to 6.4% in 2022/23 and 7.0% in 2023/24, still within the central bank's target range of 5% to 9%.

Egypt's annual inflation rose to 6.6% year-on-year in September, its highest in 20 months, from 5.7% in August, mainly due to rising food prices, the state statistics agency CAPMAS said this month.

The currency will weaken to 15.81 Egyptian pounds per dollar by the end of 2021, to 16.25 by the end of 2022 and to 17.24 by the end of 2023, the Oct. 8-20 poll of 22 economists showed.

The central bank is expected to leave its overnight lending rate unchanged at 9.25% throughout 2021/22 and 2022/23, then increase it to 10.25% by the end of June 2024, the poll found.

© Reuters. People walk through an alley of souvenir shops at a tourist market, amid the coronavirus disease (COVID-19) pandemic in Luxor, Egypt April 9, 2021.  REUTERS/Amr Abdallah Dalsh

"We believe Egypt's sizeable CA (current account) deficit explains the central bank's reluctance to cut interest rates," causing a strong increase in imports and income outflows, RenCap's Yvonne Mhango wrote in a note.

(For other stories from the Reuters global long-term economic outlook polls package:)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.