The International Monetary Fund (IMF) has announced that Egypt is the second largest economy in the Arab region in 2020 with a total amount of $361.8 billion, following Saudi Arabia.
In a report, the IMF said that the Egyptian economy has outperformed several economies in the Arab region despite the severe impacts of the COVID-19 pandemic.
It added that Egypt’s economy has surpassed oil economies in the region, including the UAE, Iraq, and Qatar.
The report added that the total size of economies monitored by the IMF in 19 countries registered $2.4 trillion, topped by the Saudi economy with the size of its economy totaling $701.5 billion.
The UAE’s economy came third, with its economy valued at $354.3 billion, followed by the Iraqi, Qatari, and Algerian economies, with the size of their economies recording $172.1 billion, $146.1 billion, and $144.3 billion respectively.
On his side, Egypt’s Minister of Finance Mohamed Maait said on Wednesday that Egypt has been adopting expanding policies to counter the ongoing challenges for the sake of attaining inclusive and sustainable development as well as maintaining the economic gains of Egypt’s economic reform programme.
He added that Egypt’s unprecedented development efforts has reflected on the budget’s fiscal performance positively through the third quarter of the current FY2020/2021 that witnessed a EGP 25 billion initial surplus.
Also, governmental investments, which were implemented in the same period, increased by 72.3 percent to reach EGP 194.7 billion.
In April, the IMF expected Egypt’s real GDP growth to deaccelerate to 2.5 percent in 2021, down from 3.6 percent in 2020, before rebounding by around the double to reach 5.7 percent in 2022.
Egypt’s inflation rate is projected to decline to 4.8 percent in 2021, down from 5.7 percent in 2020, before soaring to 7.2 percent in 2022, according to the IMF.
Moreover, the country’s current account balance is expected to continue to see negative performance estimated at -4 percent in 2021 and 2022, compared to -3.1 percent in 2020, according to the IMF.
Egypt is also expected to experience an increase in unemployment rate to reach 9.8 percent and 9.4 percent in 2021 and 2020, respectively, up from 8.3 percent in 2020, according to the IMF.
On the other hand, Fitch Solutions downgraded Egypt’s real GDP growth to 2.9 percent in the current FY2020/2021 — which ends in June — down from the 3.2 percent it forecast in December 2020.
This came within the updated report on the Middle East and North Africa (MENA) region’s economic outlook released on Monday.
Fitch also downgraded Egypt’s real GDP growth for FY2021/22 — which starts in July — to 5 percent, down from the 5.6 percent it projected in December 2020.
The report classified Egypt in the second group of countries that are experiencing poor healthcare infrastructure, insufficient access to vaccines, and poor policy choices, which all increase the risk of pushing back the vaccination timeline further.
Despite that, Fitch Solutions said in its report that Egypt is one of the few countries globally to see real GDP growth amid the COVID-19 crisis.
It attributed that to the milder lockdown and the performance of the GDP over the fiscal years.
Also, Fitch expected Egypt’s tourism sector to rebound as of the coming FY2021/22, which will provide critical support for the country’s economic growth.
Additionally, expanding in gas production will add further tailwinds to Egypt’s headline growth, according to the report.