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Fitch: Egypt among Top MENA Countries to See Pre-COVID Growth Rates in 2021

Fitch: Egypt among Top MENA Countries to See Pre-COVID Growth Rates in 2021

Wednesday, 21 April, 2021 - 06:30
Vendors work at a vegetable market amid the coronavirus disease pandemic in Cairo. (File/Reuters)

Egypt is one of three MENA economies that will see GDP growth return to pre-covid levels in 2021, Fitch Solutions analysts said on Tuesday.

“The Central Bank of Egypt’s (CBE) monetary easing of 400 bps last year, as well as expanded fiscal spending and well-executed stimulus policies, helped to cushion the economic blow of the pandemic,” MENA country risk analyst Selim Elbadri said.

Egypt’s GDP is expected to grow at a 2.9% clip in FY2020-2021, marking a slight downwards revision of the 3% Fitch predicted in January due to the vaccine rollout.

The recovery of the tourism sector, the expansion in natural gas production, and Suez Canal revenues, as well as the monetary easing policies of the Central Bank of Egypt (CBE) are expected to drive the country’s economic growth, according to Badri.

Also, the International Monetary Fund (IMF) forecast that the Egyptian economy's growth rate during the current year will be 2.5 percent compared with 3.6 percent in 2020.

In its April report, the IMF raised its global growth forecast to 6 percent in 2021. However, it expected it to shrink to 4.4 percent in 2020.

“As the recovery strengthens in 2021, global trade is projected to accelerate to 8.4 percent, mainly because of the rebound in merchandise volumes. Cross-border services trade (tourism, transportation) is expected to remain subdued until the pandemic is brought under control everywhere.” the report said.

“The pandemic continues to exact a large toll on sub-Saharan Africa. Following the largest contraction ever for the region (–1.9 percent in 2020), growth is expected to rebound to 3.4 percent in 2021, significantly lower than the trend anticipated before the pandemic,” IMF added in its report.

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