Egypt among few MENA economies to see positive growth during 2021– Fitch

Egypt is one of three MENA economies that will see GDP growth return to pre-COVID levels in 2021, Fitch Solutions analysts said at a webinar on Monday.

The country is one of few economies expected to witness a positive growth during the coronavirus (COVID-19) pandemic, they added.

The analysts’ projections are buoyed by a strong rebound expected in the oil and gas and tourism industries this year as well as Suez Canal revenues.

“The Central Bank of Egypt’s (CBE) monetary easing of 400 bps last year, as well as expanded fiscal spending and well-executed stimulus policies, helped to cushion the economic blow of the pandemic,” MENA country risk analyst Selim Elbadri said.

Egypt’s GDP is expected to grow at a 2.9 percent clip in the financial year 2020-2021, marking a slight downwards revision of the 3 percent Fitch predicted in January due to a bumpy vaccine rollout.

“Vaccinations for priority populations are expected to run from 21 March to 21 September,” deputy head of country risk Julie Beckenstein said, noting that Egypt’s vaccine rollout is lagging behind regional peers such as Israel, Morocco, and the GCC.

A robust tourism sector recovery is expected to drive medium-term growth, with the economy expected to expand at a 5 percent clip in the financial year 2021-2022, according to Elbadri.

Some 500,000 tourists visited Egypt in the first quarter of 2021, generating $600-800 million in revenues, with some 2 million tourists visiting the country in the nine months since commercial flights resumed following the initial wave of the virus.

Tourism Minister Khaled El Anany recently said Egypt could see a return to pre-covid visitor numbers as early as fall 2022.