Fitch downgrades Egypts real GDP growth to 2.9% in FY 2020/2021

ArabFinance: Fitch Solutions has downgraded Egypts real GDP growth to 2.9% in the current fiscal year (FY) 2020/2021, ends in June, down from the 3.2% it forecasted in December 2020, Fitch Solutions analysts said at a webinar on April 19^th.

The announcement came within the updated report on the Middle East and North Africa (MENA) regions economic outlook.

The rating agency also downgraded Egypts real GDP growth for FY 2021/2022, starts in July, to 5%, down from the 5.6% it projected in December 2020.

Fitchs report classified Egypt in the second group of countries that are experiencing a poor healthcare infrastructure, insufficient access to vaccines, and poor policy choices, which all increase the risk of pushing back the vaccination timeline further.

On the other hand, Fitch said that Egypt is one of the few countries globally to see real GDP growth amid the COVID-19 crisis.

The report attributed the reason to the milder lockdown and the performance of the GDP over the fiscal years.

However, Egypts tourism sector is expected to rebound as of the coming FY 2021/2022 that will provide critical support for the countrys economic growth.

Expanding in gas production will add further tailwinds to Egypts headline growth

The Central Bank of Egypts (CBE) monetary easing of 400 bps last year, as well as expanded fiscal spending and well-executed stimulus policies, helped to cushion the economic blow of the pandemic, MENA country risk analyst Selim El Badri said.

El Badri added that Egypt will be the driver of economic growth in the region in FY 2021/2022, as it is among the three top countries that will approach their pre-pandemic growth levels in the same fiscal year.