Egypt says economic indicators are up, despite COVID-19

People wearing face masks walk on a street in Cairo, Egypt, on June 12, 2020. Egypt witnessed on Friday a record of 1,577 single-day new COVID-19 cases, raising the total infections confirmed in the country since mid-February to 41,303, said spokesman with the Health Ministry. (Xinhua/Ahmed Gomaa)
People wearing face masks walk on a street in Cairo, Egypt, on June 12, 2020. (Xinhua/Ahmed Gomaa)

Egypt has achieved positive economic indications in the fiscal year 2019-2020 compared to the previous year amid the COVID-19 impact, said Egyptian Prime Minister Mostafa Madbouly in a statement on Wednesday.

The fiscal year in Egypt begins in July.

“The country also achieved a primary surplus of 1.8 percent of gross domestic product (GDP) in 2019-2020, compared to a target of 2 percent before the outbreak of COVID-19,” Madbouly said.

Egypt’s overall budget deficit narrowed to 7.8 percent of the GDP in the fiscal year 2019-2020, down from 8.2 percent in 2018-2019, despite the impact of the pandemic, he added.

Madbouly pointed out that though the targeted indications have not been fulfilled, the numbers of the initial surplus and the overall deficit are better than last year.

The county’s GDP growth is expected to stand at 3.8 percent of the fiscal year 2019-2020, down from a budget initial projection of 6 percent, the cabinet statement quoted Finance Minister Mohamed Maait as saying during the weekly government meeting.

Maait added that the country’s debt ratio is expected to decline to 86.2 percent of GDP at the end of June from 90.4 percent a year earlier.

The state budget debt has declined to 86.2 percent in the GDP in June 2020 compared to 90.4 percent in the same period in 2019, the minister added, deeming it as a big accomplishment that implied the government’s good and balanced plan in controlling the impacts of the pandemic.

The country’s economy was hit sharply for several years in the aftermath of 2011 and 2013 uprisings. To boost the economy, Egypt has adopted a reform plan in 2016 that included float of the currency, increase of taxes, and lift of the subsidy.

In the last three years, the economy was boosted by a recovery of tourism and strong remittances from Egyptians working abroad, the main sources of hard currency.

On Tuesday, Fitch Ratings has maintained Egypt’s B+ ratings with a stable outlook, supported by the country’s commitment to furthering the reform program.

According to Fitch, the COVID-19 shock is negatively affecting Egypt’s external finances, GDP growth, and fiscal performance, but Egypt’s economic reforms have provided the country with a degree of flexibility to deal with the pandemic impacts.

The report also expected the growth to recover up to 5.5 percent in fiscal year 2021-2022 and to be maintained at just 5 percent in the medium term assuming a gradual return of tourists.

Madbouly hailed Fitch report as a message that asserts the confidence of the international financial institutions in the national economy and in the reform measures that have been implemented by the government.

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