According to forecasts by economists polled by Reuters, Egypt’s economy is expected to grow 5.3 percent in the fiscal year that ends in June.
Since the 2011 uprising that led to the fall of Hosni Mubarak, the country’s economy, with the exception of the oil sector, has struggled to attract foreign investors. In December 2018, the non-oil private sector in Egypt shrank, while private sector activity has expanded in only five months over the last three years.
An economist at NKC African Economics, Nadene Johnson said “medium-term growth remains slightly subdued as the government maintains a strong grip on the economy, but is nonetheless supported by an expected expansion in the infrastructure, manufacturing and tourism sectors”.
Egypt has been implementing tough economic reforms as part of a three-year, $12 billion deal agreed with the International Monetary Fund in November 2016. The reforms being implemented to attract investors include- a value-added tax, cuts to energy subsidies and a steep currency devaluation.
The forecast of the economists polled from January 8 to 22 put growth at 5.3 percent in the current 2018/2019 fiscal year and 5.5 percent the following two fiscal years. Egypt had targeted growth at 5.8 percent in its 2018/2019 fiscal year budget.
Maya Senussi, a senior economist for the Middle East at Oxford Economics noted that “Egypt should enjoy a relatively stable pace of growth over the next couple of years … but the economy will remain strained by ongoing fiscal consolidation, soft private sector activity and uncertainty in the global economy”.
She added that “we see greater support from public investment this year, reinforced by lower oil prices lowering subsidy spending. Consumers also stand to gain from lower oil prices, while lower interest rates should generally inject some life into the private sector”.