Egyptian Economy Expected to Slow During Current Fiscal Year

Egyptian Economy Expected to Slow During Current Fiscal Year

The Egyptian economy is expected to grow by a subdued 3.3% during fiscal year (FY) 2020/2021, according to a Reuters’ poll based on 20 economists.

The growth would decline from the 5.9% the state had been aiming for before the COVID-19 pandemic, Reuters said on October 27th.

“Our assumptions for FY 2020/2021 are based on expected circa 50% Year on Year slash in tourism revenue with a negative impact on employment levels, which could also lead to muted real growth in household consumption,” HC Securities analyst Monette Doss told the news agency.

Egypt’s economic growth would recover to 5% in FY 2021/22 and 5.5% in 2022/23, according to the poll.

The asked economists predicted the country’s annual urban inflation to fall to 5.8% in FY 2020/2021, before hitting 7% in the next two FYs until June 30th 2023.

“We expect inflation to trend higher over the medium term as the exchange rate weakens and global commodity prices tick higher amid a recovery in global demand,” according to Callee Davis, an economist at NKC African Economics.

Annual urban inflation rose to 3.7% in September from 3.4% in August, Reuters cited detailed statistics.

Net international reserves have continued to rise in September, according to the Central Bank of Egypt (CBE).

Economists predicted the CBE’s overnight lending rate would slide to 9.25% by the end of FY 2020/2021 from the current 9.75%, then again to 8.50% and to 8.00% in 2022 and 2023, respectively.

The central bank reduced last month its key interest rates by 0.5%.

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