Egypts GDP likely to see positive growth in near-term: Report

ArabFinance: Egypt’s gross domestic product (GDP) is likely to record positive growth rates in the near-term backed by domestic demand, particularly gross domestic investments, according to a recent report by the Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC).

The real GDP growth will remain partially impacted by a positive base-effect until Q4 2021, the report added.

In the medium term, the real GDP growth is projected to witness a recovery, assuming a continuous lower uncertainty over the pandemic and its impact on economic activity.

The report noted that keeping interest rates unchanged in the meantime comes in line with the CBE's annual headline inflation target of 7% for the fourth quarter (Q4) of 2022.

It is worth noting that the real GDP growth at market prices recorded 7.7% in Q2 2021, compared to 2.9% in Q1 2021, which implies that growth for fiscal year (FY) 2020/2021 registered 3.3% on average, according to the report.

In Q2 2021, the overall balance of payments (BoP) of Egypt recorded a marginal surplus of $0.1 billion, versus a deficit of $3.5 billion Q2 2020, the report showed.

The realized BoP surplus was reflected in the gradual accumulation of international reserves, which grew to $40.6 billion in June 2021 from $38.2 billion in June 2020.

Meanwhile, the current account deficit increased to $5.1 billion in Q2 2021 Q2 from $3.8 billion in Q2 2020.

Tourism revenues maintained robust recovery in Q2 2021, surging by 473% year-on-year (YoY).

The report also mentioned that net foreign direct investment (FDI) inflows to Egypt reached $5.2 billion in FY 2020/21, down from 7$.5 billion the previous fiscal year.