Egypt is the Middle East and North Africa (MENA) region’s outperformer, outside the Gulf Cooperation Council (GCC) countries, maintaining its steady reform progress, according to Fitch Solutions.
In its monthly economic outlook update report on MENA region for August, shared with Ahram Online, Fitch said that Egypt and UAE are the only countries in the region to maintain progress in their recovery from the pandemic and on their economic reform trajectory, especially now that Egypt has shifted focus to long-term business reforms.
Fitch downgraded Egypt’s real GDP growth slightly to three percent in 2021, down from 3.1 percent projected in July, while maintaining Egypt’s inflation forecast at 5.1 percent, according to the report.
Fitch attributed its forecast to a number of factors including the deal Egypt’s government has signed with Italian company ENI for the sake of producing and exporting green hydrogen, with the government expecting to invest around $4 billion over the next three years.
Moreover, the government has awarded the management and operations of its railway stations to local companies in the private sector.
Meanwhile, Fitch said that Egypt’s fiscal reforms remain a key area of focus; as the government raised domestic fuel prices for the second time in 2021, it also implemented a single, electronic channel that collects, assess tax filings and applies standardised penalties.
For the country’s interest rates, Fitch expected it to go down to 9.25 percent.
On the MENA region level, Fitch underpinned Saudi-UAE tension concerning OPEC+ disagreement as an example of the growing tensions between the two countries that could affect the region’s recovery efforts.
Elsewhere in MENA, including Algeria, Iraq and Iran, Fitch expected countries to see low reform scores..