During a webinar hosted by AmCham earlier in May, Planning and Economic Development Minister Dr. Hala Helmy El Saeed said that Egypt’s economic recovery post-COVID will most likely be U-shaped, rather than V- or W-shaped (as shown in the graph). Dr. Hala El Saeed elaborated that the government has prepared various scenarios for the country’s economic recovery over the remainder of 2020, however, U-shaped recovery is the most probable scenario.
It is expected that economic growth rate will remain very low for the rest of 2020 and the upcoming fiscal year (3.5%). Egypt’s GDP growth in 3Q2019-2020 came in at around 5%, the minister said.
Unemployment figures in Egypt are also expected to end 2020 at around 10%, compared to 7.5% in the second quarter of 2019.
On June 26th, 2020, The Executive Board of the International Monetary Fund (IMF) approved a 12-month Stand-by Arrangement for Egypt (SBA), with access equivalent to US$5.2 billion.
The new program aims to help Egypt cope with challenges posed by the COVID-19 pandemic by providing balance of payments and budget support. The program would also help the authorities safeguard the macroeconomic stability achieved over the past three years, support health and social spending to protect vulnerable groups, and advance a set of key structural reforms to put Egypt on a strong footing for sustained recovery with higher and more inclusive growth and job creation over the medium term.
Dr. Hala El Saeed said that any standby IMF funding will be used to implement pro-business structural reforms and to plug payment gaps faced by businesses. Additionally, the government has been working to boost the private sector participation as part of the IMF sanctioned program. Since the program kicked off in 2016, authorities identified six structural reform priorities, including digital transformation, industry, agriculture and logistics, the minister said.
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