Balanced policies lift GDP to LE6.4 trillion

By Ahmed Kamel

A number of key economic sectors are expected to drive the nation’s overall growth in the coming years as the Covid-19 negative impacts weaken. Construction, agriculture and industry will be the key growth drivers as the country launches structural reforms.

The gross domestic product (GDP) may reach LE6.4 trillion ($410 billion) in fiscal year (FY) 2020-2021, ending June 30, Finance Minister Mohamed Maait announced, attributing growth to development investments carried out by the state. The government targets growth of 5.4 per cent in FY 2021-2022.

GDP at current prices rose to LE5.5 trillion in the fiscal year 2019/20, up from LE5.2 trillion a year earlier, according to data from the Cabinet’s media center. GDP stood at LE3.4 trillion in FY 2016-2017.

Real GDP posted a preliminary two per cent growth in Q4 2020, up from 0.7 per cent in the previous quarter, according to Central Bank of Egypt (CBE) data.

In 2020, Egypt’s economy grew at 3.6 per cent of GDP as a balanced monetary policy has helped the most populous Arab country cushion the repercussions of the Covid-19 pandemic.

The government is determined to carry on with such development projects nationwide and simultaneously go ahead with second round of reforms to bolster the country’s economic structure.

The ultimate objective of these reforms is to improve living standards and improve public services.

The International Monetary Fund (IMF) expects Egypt’s economy to expand by 2.5 per cent of GDP in 2021, down from 2.8 per cent as previously projected. The construction sector is expected to grow at a higher pace by 7.7 and 7.3 per cent in the FYs 2020-2021 and 2021-2022 respectively, according to IMF data.

The IMF forecasts Egypt’s economic growth at 5.6 and 5.8 per cent in FYs 2023-2024 and 2024-2025 respectively. The construction sector may expand by 11.4 per cent in FY 2024-2025.

Agriculture and industry are expected to grow by 3.5 and 2.6 per cent respectively in the FY 2020-2021, IMF data shows.

Egypt’s economic growth averaged 4.6 per cent of GDP between 2003 and 2012, according to IMF data.