Egypts growth likely to accelerate to 5.5% in FY 2021/2022: World Bank Report

ArabFinance: Egypt is expected to get back to the pre-Covid growth levels over the medium-term based on the possible scenario of a gradual improvement in the pandemic situation, according to the latest Egypt Economic Monitor report issued by the World Bank.

Economic growth is likely to accelerate to 5.5% in fiscal year (FY) 2021/2022 from 3.3% in FY 2020/2021 on the back of global recovery, the report showed.

The US-based international financial institution also expected Egypt’s external debt servicing obligations to be met.

The North African state’s external debt stood at $137.9 billion at the end of June 2021, representing 34% of gross domestic product (GDP), the report added.

The current account deficit-to-GDP ratio is forecast to fall slightly to 4.4% in FY 2021/2022 from 4.6% in FY 2020/2021 due to an expected uptick in remittances.

Moreover, the overall budget deficit-to-GDP is expected to drop to around 6.8% by FY 2022/2023 from 7.4% in FY 2020/2021.

The primary surplus-to-GDP ratio is also forecast to increase to 2% over the medium-term from an estimated 1.5% in FY 2020/2021.

The Egyptian government debt-to GDP ratio is projected to fall to 90% by the end of FY 2022/2023 from an estimated 91.6% for the end of FY 2020/2021.

The country’s real GDP growth has been witnessing a solid rebound since the fourth quarter (Q4) of FY 2020/2021, driven by the favorable annual base efforts, improved global economic conditions, and eased restrictions.

The report also highlighted that the key features of the government’s digital transformation, including the roll-out of end-to-end digital solutions, establishing integration and inter-connectedness of the different government systems.

According to international indices, such as the United Nations E-Government Development Index and the newly constructed World Bank GovTech Maturity Index, Egypt reached a relatively signficant level of government digital transformation.