Egypt, one of Africa’s vibrant tourism destination, has recorded a 5.6 per cent Gross Domestic Product (GDP) in the past six months, to December 2019, Reuters said a government statement revealed the information.
Tourism has been attributed to Egypt’s economic growth in the last three years, strong remittances from Egyptian workers abroad and recently discovered natural gas fields coming on stream.
Hence, the nation’s growth has mainly been driven by the state sector. The World Bank (WB) spotlighted the nation’s economy and noted that, on the sectoral side, gas extractives, wholesale and retail trade, real estate and construction have been the main drivers of growth.
Unemployment decreased to 7.5 per cent in the fourth quarter of FY19 (from 9.9 per cent a year earlier), although accompanied by shrinking labour force participation.
According to Reuters January poll, the economy is expected to grow 5.8 per cent in the fiscal year ending on June 30, and 5.9 per cent in 2020/21.
However, WB highlighted that, in the Financial Year (FY) 2019 (ending June 30th, 2019), real GDP growth reached 5.6 per cent, up from 5.3 per cent in FY18.
Data for the first nine months of FY19 show that this pickup is driven by net exports. Private investment is also picking up, although from a low base and with sluggish Foreign Direct Investment (FDI) mainly directed to hydrocarbons.
In addition, the African Development Bank (AfDB) economic outlook on Egypt, estimated at 5.6 per cent for 2019, is forecast to strengthen to 5.8 per cent in 2020 and 6 per cent in 2021, supported by broad-based economic reform programs since 2016.
The outlook also cited that, other factors supporting growth include the recalibration of the government’s social inclusion programs away from general subsidies on energy products to targeted transfers and improvements in the business environment.