The World Bank issued on Tuesday an economic monitoring report on Egypt, which said that the country's economic reforms are a step towards achieving economic stability and restoring trust in the economy.
The reforms, especially the legislative ones, have led to an improvement in the business climate and are attracting private investments, the report said.
The report also noted that the pillars of the upcoming phase of the economic reforms are achieving macro-economic stability, offering more private sector partnership in the economy, creating more job vacancies, and improving living standards.
“The economic reform programme makes investments and exports the essential engines for economic growth instead of consumption. So, Egypt’s economy has grown by 5.3 percent in FY 2017/18 compared to 4.2 percent in FY 2016/17, with an average growth rate of 3.5 percent from 2013 to 2016,” the report said.
The private sector has become, for the first time since FY 2008/09, contributed to GDP growth by 1.3 percent, while overall investments contributed to GDP growth by 2.4 percent of a total GDP growth of 5.3 percent.
The report projected GDP growth to continue to rise gradually to reach 6 percent by FY 2021 and private investments to increase with the continued application of reforms improving the business climate.
The report predicts that exports will increase along with the recovery of the tourism sector and Suez Canal revenues, in addition to a significant increase in oil exports. Foreign direct investment (FDI) is also expected to go up to 3 percent of FDI flows from the total of GDP by 2021 compared to 2018.
Still, there are untapped growth opportunities for Egypt’s economy, the report said, especially in the exporting sector. The report said that trade agreements and creating a suitable business atmosphere will contribute to export growth and, consequently, the growth of Egypt’s economy.
In a statement, Egypt’s Minister of Investment and International Cooperation Sahar Nasr emphasised Egypt's solid relationship with the World Bank, especially in education and healthcare.
“The World Bank is supporting President Abdel-Fattah El-Sisi’s initiative to invest in human capital and infrastructure. The report shows the achievements made by the government in economic reform. There are discussions with the World Bank related to a business practices report that will be released within a few months,” Nasr said.