The International Monetary Fund (IMF) expects Egypt’s tourism revenues losses to exceed 2 per cent of gross domestic product (GDP) in 2020 due to COVID-19 crisis.
A report by the IMF titled “EXTERNAL SECTOR REPORT: Global Imbalances and the COVID-19 Crisis” noted that a recent study (UN World Tourism Organization 2020) included a scenario involving a gradual lifting of travel restrictions starting in September. The scenario implies tourism receipts 73 per cent below their 2019 levels, with a direct impact on tourism trade balances ranging from –6 per cent of GDP to 2 per cent of GDP.
“During the first four months of 2020 international tourism arrivals were about 50 per cent lower than over the same period in 2019, with deeper declines for related indicators, such as international flight arrivals and hotel reservations,” IMF stated.
It also noted that the projected direct impact on tourism trade balances in 2020 will depend critically on the pace of tourism recovery, which is highly uncertain.
IMF also noted that the rise in tourism trade balances is expected to be spread more evenly across tourism services net importers.
“Although uncertainty is high, the effects on tourism may persist to some extent in 2021 and beyond. 40 per cent of respondents to a UN World Tourism Organization survey expect international tourism demand to start recovering only in 2021, with professionals in the Americas being slightly more pessimistic,” it said.
Earlier the Central Bank of Egypt (CBE) stated that tourism revenues in Egypt declined 11.5 per cent or $300 million during the first quarter (Q1) of this year, to record $2.3 billion.
The IMF noted that as pe currency movement, emerging markets and developing economies that entered the crisis with stronger economic and financial fundamentals have generally experienced smaller depreciation and stronger rebounds in the value of their currencies more recently.
“In some cases, such as Egypt and Turkey, the significant decline of foreign exchange reserves points to strong underlying depreciation pressures,” IMF noted.
According to the Central Bank of Egypt, Egypt’s foreign reserves rose by about $2.2 billion, recording $38.2 billion by the end of June 2020, compared to $36 billion during May 2020.