Egypt’s real GDP growth is projected to jump to 5 percent in the current FY2021/2022 — which starts on 1 July and concludes on 30 June — and to hit 5.5 percent in FY2022/2023, according to Fitch Solutions.

In its recent Middle East and North Africa (MENA) region monthly outlook report, shared with Ahram Online, Fitch expected Egypt’s real GDP to reach 3.1 percent in 2021 — on an annual basis — while average inflation is projected to hit 5.1 percent during the same year.

“Egypt is a regional bright spot despite the slow vaccine rollout. The Egyptian economy is one of the few globally to have grown on an annual basis in the past year despite the COVID-19 crisis, meaning that the economy will far exceed its pre-pandemic size in 2021,” according to the report.

It also predicted Egypt’s interest rate to average at 9.25 percent and the US dollar to be traded at EGP 16.20.

It added that despite the slow start of the vaccine rollout, Egypt continues to impose fairly mild restrictions that will cause fewer disruptions to regular business activity.

“Meanwhile, fixed investments will benefit from a large project pipeline funded by both the public and private sectors. Indeed, the FY2021/2022 budget boosted capital expenditures by 60 percent,” said the report.

For MENA, Fitch expected the region’s GDP growth to rebound by 3.6 percent in 2021 after contracting by 4 percent in 2020.

“This is slightly above the 2011-2020 average growth rate of 2.7 percent,” Fitch elaborated.

Consequently, MENA’s regional economy’s size will not return to pre-COVID-19 levels in 2021, according to the report.

The region, excluding Gulf Cooperation Council countries, is facing significant bottlenecks to the process of inoculation against the virus. The report added that counting on COVAX for vaccine procurement means significant delays to the vaccination process.

Accordingly, Fitch predicted that most of these countries will not vaccinate their priority populations until 2022.

“This suggests that further COVID-19 waves — like the ones hitting Tunisia, Iran, and Iraq — are likely later this year. Some countries may attempt to diversify their procurement by buying Chinese vaccines, but these have proven to be less effective. All told, we think that the easing of social distancing measures in many of these countries will be delayed until 2022,” the report said.