Gross domestic investments and consumption pushed overall GDP growth by 5.3 percentage points (p.p) in Q1 2021
Egypt’s real GDP growth recorded an initial 7.7% in the 2nd quarter of 2021, reflecting a strong positive base effect states the Central Bank of Egypt’s (CBE) recent Monetary Policy Report.
It added that “actual data showed that growth inched up to 2.9% in 2021 Q1 compared to 2.0% in the previous quarter, implying that growth for FY 2020/21 recorded 3.3% on average.”
Gross domestic investments and consumption pushed overall GDP growth by 5.3 percentage points (p.p) in Q1 2021, compared to 3 percentage points during the previous quarter, with private domestic demand recording at 4.2 p.p and public demand at 3.3 p.p in the 1st quarter of the year.
“Over the medium term, Egypt’s GDP growth is forecasted to follow a better than previously expected recovery trajectory, assuming a continued ease in the degree of uncertainty surrounding the pandemic and its impact on economic activity,” explained the report.
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The bank did note that the negative contribution of net exports towards overall GDP growth in 2021 Q1 was aggravated by an increase in real imports, as well as a sustained decrease in real exports on annual terms, contributed negatively to GDP growth.
Sectoral GDP growth grew by 1.5% in Q1 2021, pushed by sustained improvement in private sector GDP, which supported economic activity and contributed positively towards sectorial GDP by 1.2 p.p.
Alongside, the positive contribution of natural gas extractions, private sector activity remains supported by the return of tourism and recovery of the non-petroleum manufacturing sector.
“Global economic activity continues to recover from the COVID-19 pandemic, although growth remains uneven across regions, as some countries are yet to contain the spread of the virus. Prospects for global economic recovery remain contingent on the scale of distribution, as well as the efficacy of vaccines,” the report stated.
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Growth in public sector activity was reinforced by the positive contributions of natural gas extractions and the general government but continues to be dragged down by petroleum manufacturing and oil extractions for the second consecutive quarter, the CBE noted.
Signaling continued economic activity recovery through June-July 2021 were the manufacturing index’s solid expansion on average in 2021 Q2 for the first time since 2019 Q4, total car sales recording its highest annual growth rate in 2021 Q2, the increase in the Suez Canal’s net tonnage, and increase in tourist stays.
