Egypt Economic Forecast

Egypt Economic Outlook

February 6, 2018

The economy is slowly turning a corner. In January international reserves rose for the 15th straight month, while the PMI reading suggested business conditions largely stabilized, thanks in part to greater new export orders. In addition, the primary budget deficit for July–December fell to a multi-year low, due to tight wage bill control and higher tax revenue. The improved macroeconomic position led Fitch Ratings to recently revise its outlook to positive. The government is pushing ahead with reforms: On 28 January parliament passed Egypt’s first bankruptcy law, to simplify the bankruptcy procedure and entice foreign investment. However, the country still faces myriad challenges, and the IMF recently urged the government to boost the private sector and strengthen the labor market. On the political front, President el-Sisi looks set to romp home in presidential elections scheduled for end-March. Most challengers have dropped out of the race due to intimidation, with the one remaining candidate accused by some of being in cahoots with the current leader.

Egypt Economic Growth

Growth should accelerate in FY 2018. Investment will likely rise sharply, boosted by stronger business sentiment and an improved regulatory environment, while the external sector will benefit from the weaker pound. However, the elevated debt burden could become a pressing concern if reform momentum ebbs. Met the why particular analysts expect GDP to expand 4.5% in FY 2018, up 0.1 percentage points from last month’s forecast, and 4.9% in FY 2019.

Egypt Economy Data

20122013201420152016
Population (million)82.484.686.889.090.2
GDP per capita (USD)3,3543,3803,4743,7173,724
GDP (USD bn)276286302331336
Economic Growth (GDP, annual variation in %)2.22.02.24.44.3
Consumption (annual variation in %)6.52.84.13.14.6
Investment (annual variation in %)-  -  -  -  -  
Industrial Production (annual variation in %)2.90.7-8.59.3-8.8
Unemployment Rate12.713.313.212.812.6
Fiscal Balance (% of GDP)-11.8-13.7-12.1-11.5-12.2
Public Debt (% of GDP)78.188.289.493.1113
Money (annual variation in %)12.418.915.818.639.0
Inflation Rate (CPI, annual variation in %, eop)4.711.711.111.123.3
Inflation Rate (CPI, annual variation in %)7.19.511.111.413.8
Policy Interest Rate (%)9.258.259.259.2514.75
Exchange Rate (vs USD)6.366.957.157.8318.13
Exchange Rate (vs USD, aop)6.076.877.087.7111.09
Current Account (% of GDP)-3.7-2.2-0.9-3.7-5.9
Current Account Balance (USD bn)-11.1-6.4-2.7-12.1-19.8
Trade Balance (USD billion)-34.1-30.7-34.1-39.1-38.7
Exports (USD billion)25.127.026.122.218.7
Imports (USD billion)59.257.760.261.357.4
Exports (annual variation in %)-7.17.6-3.4-14.7-15.9
Imports (annual variation in %)9.5-2.64.31.9-6.4
International Reserves (USD)15.615.016.720.117.6
External Debt (% of GDP)12.415.115.314.516.6

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Egypt Facts

ValueChangeDate
Bond Yield14.250.0 %Feb 20
Exchange Rate17.710.0 %Feb 20
Stock Market1,5110.53 %Feb 20

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