EBRD Sees 5.3% Expansion in Egypt

The European Bank for Reconstruction and Development has upgraded its economic growth forecast for Egypt in the financial year 2017/2018 to 5.3%. The decision was attributed to an improved competitiveness and greater investor confidence.

In Egypt, growth continued to accelerate for the fifth consecutive quarter and reached 5.3% year-on-year in the second quarter of the financial year 2017/2018, Yahoo reported.

The acceleration was driven by manufacturing, trade, tourism and construction, as well as the recovery in mining. “Exports and investment picked up and became more prominent drivers of growth thanks to the liberalization of the exchange rate in November 2016, the resolution of foreign exchange shortages and the strong performance under the IMF-supported program.

Meanwhile, private consumption slowed down and its contribution to growth declined, the result of the record levels of inflation which reached its peak in July 2017 and averaged 29.6% in 2017, thus eroding purchasing power.

“Economic activity is expected to grow at 5.3% and 5.5% in financial year 2017/2018 and financial year 2018/2019, supported by the continued boost in confidence, recovery in tourism, increase in foreign direct investment, improved competitiveness, continued strengthening of exports, the start of natural gas production from the Zohr field, the implementation of business environment reforms and prudent macroeconomic policies.” the report indicated.

Meanwhile, Egyptian petroleum exports increased to $407 million during the first two months of 2018 from $385 million during the same period a year earlier, the state-owned statics agency CAPMAS said Saturday.

Egypt’s non-petroleum exports jumped 200% in the first two months of 2018, reaching $64 million, compared to $21 million in the same period of 2017, the agency data showed. Egypt’s imports in the same period stood at $4.5 million.