Deutsche Bank: Egypt’s economy could grow at a 3.5% clip this financial year

Egypt’s economy could grow by 3.5 percent clip this financial year, supported by government spending, expansion in the ICT and energy sectors, and growth in net exports, Deutsche Bank said in a report picked by local press.

Meanwhile, the government has allocated 100 billion Egyptian in a stimulus package directed to construction and non-oil industries which will lead to economic growth, according to the bank.

Positive growth rates underpin Egypt’s status as an emerging market darling, the bank said. However, the pandemic-induced slowdown brought growth to a level lower than the country’s actual capabilities, it added.

On the other hand, Egypt is one of just three Middle Eastern and Central Asian economies that will escape contraction this year, the IMF has said earlier this week.

Real interest rates in Egypt are expected to rise to 5.3 percent next month from a current 4.9 percent as inflation figures in October are forecast to remain subdued, the bank added. This gives policymakers’ room to cut rates without driving away carry traders in search of high real returns.