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Hermes expects Egypt's economy to grow by 5.8% in 2020

MENA , Sunday 15 Dec 2019
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Hermes Financial Group, one of the leading investment banks in the Middle East and Africa, has expected Egypt's economy to grow by 5.8% of GDP in 2020 and to see a growth rate of 5.7% in 2021.

In its annual report on Sunday, a copy of which MENA obtained, Hermes said that the annual inflation rate is predicted to fall from 13.9% in 2019 to 5.9% in 2020.

The financial group forecast that the country's tourism revenues will hit a record of USD 15.1 billion in 2020 and USD 17.3 billion in 2021.

It also expected that the Suez Canal's proceeds will register USD 5.9 billion in 2020 and USD 6.1 billion in 2021.

Hermes projected that net money transfers will reach USD 25.5 billion in 2020 and stand at USD 26.8 billion in 2021.

It also expected an increase in the volume of foreign direct investments to register USD 6.3 billion in 2020, and USD 7.3 billion in 2021.

Concerning the financial sector, Hermes predicted that the country's tax revenues will rise from USD 43.5 billion in 2019 to USD 53 billion in 2020 and to USD 58.6 billion in 2021.

The government support is expected to reach USD 11 billion in 2020 and USD 12.3 billion in 2021, Hermes said.

It expected that the primary budget surplus will go up by 2.1% of GDP in 2020 and 2.2% in 2021, while the fiscal balance is projected to hit USD 26.8 billion in 2020 and USD 27.3 billion in 2021.

Hermes predicted that the foreign debt will recede to 17.2% of GDP in 2020 and to 16.7% in 2021, while the net foreign assets at the banking sector will stand at USD 18 billion.

It suggested that the country's foreign reserves will register USD 43.5 billion in 2020 and USD 41.7 billion in 2021.

The financial group indicated that the US dollar exchange rate will continue to fall against the Egyptian pound to reach EGP 16.23 in 2020 and EGP 16.55 in 2021.

Hermes projected that the interest rate will decline from 16.8% in 2019 to 12.3% in 2020 and to 11.3% in 2021.

Credit growth in the private sector is expected to rise by 15.4% in 2020 and 17.2% in 2021, it said. 

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