Economic activity improved in the wholesale and retail trade, construction, agriculture and telecommunication sectors
The European Bank for Reconstruction and Development (EBRD) forecasted Egypt’s economic growth to climb to 4.9% in the current fiscal year (FY) 2021/2022, with the bank noting that growth fell to 3.3% in the previous fiscal year (FY 2020/2021).
Economic activity improved in the wholesale and retail trade, construction, agriculture and telecommunication sectors, but these were offset by sluggish manufacturing activity and weak tourism, wrote the bank as it explained the FY 2020/2021 deceleration.
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Its new expectations for economic growth was attributed to increased growth in the telecommunications sector, private consumption and investment, as well as the return of foreign direct investment (FDI), but notes that there are still risks due to a slow uptake of vaccination and the weak outlook in the tourism sector.
The EBRD expects the economy to grow at a 5.3% clip during the calendar year, higher than its summer prediction of 4.2%.
According to its latest Regional Economic Prospects (REP) report on Thursday, the bank said it raised its growth forecast for the southern and eastern Mediterranean (SEMED) region to 4.2% for 2021.
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The recovery in economic activity is primarily boosted by a rebound in the agriculture and telecommunications sectors and limited growth in tourism and exports.
"The future economic rebound will depend on the strength of the global recovery, progress in the vaccination rollout, political developments, and the implementation of reforms to the business environment," the bank noted.
Output in the SEMED region is projected to grow by 4.4% in 2022 on the back of growing economic activity, especially in Egypt and Morocco.
