The recent decline in Egypt’s unemployment rate indicates that the economic recovery is becoming more entrenched, a new report issued by Oxford Economics Africa said.
The country’s unemployment rate reached 7.4 percent in the fourth quarter of 2021, according to the latest figures released by Egypt’s Central Agency for Public Mobilization and Statistics.
By calculating the average of jobless rate for all four quarters, the Oxford Economics briefing noted that the annual unemployment rate has dropped to 7.4 percent in 2021 from 7.9 percent the previous year.
“This reflects an increase in the number of employed persons, while the supply of labor ticked higher,” the briefing, which was released on Friday, noted.
“In this regard, around 899,750 people re-entered the labor force in 2021, as looser COVID-19 restrictions meant that Egyptians were free and able to look for work.”
Such figures suggest that the Egyptian economy is producing enough jobs to absorb the growing supply of workers. Nevertheless, the labor market remains weak and incapable of attracting enough youth, which can be a recipe for social turmoil, according to the report.
“Many Egyptians – especially younger Egyptians − never enter the labor force or become discouraged and leave the labor force because they cannot find work. A youth excluded from economic opportunities is a potential source of instability,” read the briefing.
To prove its point, the report referred to the discrepancy between the latest figures of the labor force and those of the working age population.
“Despite a growing labor supply, the latest labor force reading of 29.4 million is only 1.7 percent higher than that recorded four years ago, while the working-age population has increased by around 5.6 percent over this period,” said the briefing.
Egypt’s strategic vision for sustainable development aims to bring the unemployment rate to down to five percent by the year 2030. In recent years, the government has taken pride in the decline in unemployment rates from 13.15 percent in 2013 to 7.9 in 2020.
Stability after years of political turmoil, coupled with the adoption of an IMF-dictated economic restructuring program, is widely held as the reason behind the improvement of the country’s various macroeconomic indicators, including employment figures.
However, many labor economists argue that the growth of the Egyptian economy has been driven in recent years by real estate development and infrastructure, which usually generate low-quality causal jobs.
Hence, the country’s growing population of educated youth in general tends to shun the labor market.
(Reporting by Noha El Hennawy; editing by Cleofe Maceda)
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