World Bank raises Egypt’s GDP growth forecast to 5.5 percent in 2021

Doaa A.Moneim , Thursday 7 Oct 2021

The World Bank (WB) has raised its forecasts for Egypt’s real GDP growth for 2021 to 5.5 percent, up from 4.5 percent predicted in June before hitting 6 percent in 2022.

 World Bank
File photo of the World Bank - Reuters

In its regional economic update report released Thursday, the World Bank expounded that the performance of oil importing countries (OICs) in the Middle East and North Africa (MENA) has been dominated by the recovery of Egypt’s economy, which accounts for more than half of this group’s GDP.

Meanwhile, the report estimated the cumulative cost of the pandemic on the MENA region’s GDP in 2021 is expected to be around $200 billion.

“These costs are calculated by comparing where the region’s GDP would have been if the pandemic had not hit. According to the report, the region’s GDP contracted by 3.8 percent in 2020 and is forecast to grow by 2.8 percent in 2021,” according to the report.

The report also projected the MENA region’s GDP to grow by 4.2 percent in 2022.

The World Bank also predicted that most MENA economies will not reach pre-pandemic levels of GDP per capita, adding that the recovery process will be uneven because the region-wide estimates mask differences across and within countries.

The report pointed out that each economy’s performance in the region depends heavily on its exposure to commodity-price fluctuations and how well it managed the pandemic.

“The pandemic’s crippling impact on economic activity in the region is a painful reminder that economic development and public health are inextricably linked. It is also a sad reality check that MENA’s health systems which were considered relatively developed, cracked at the seams under the crisis,” said Ferid Belhaj, WB’s vice president for MENA.

Going forward, there must be a stronger focus on building core public health functions and leveraging the power of health data and preventive health systems to accelerate the region’s recovery and to prepare for future public health emergencies that may arise due to future pandemics, climate-related disasters and even social conflict, according to Belhaj.

The report projected the region's GDP per capita to grow by only 1.1 percent in 2021 after declining by 5.4 percent in 2020.

By the end of 2021, the region’s GDP per capita will still be below the 2019 level by 4.3 percent, according to the report.

As per the report, 13 out of 16 countries in the region will have lower standards of living in 2021 than their pre-COVID levels.

“The last two years have shown that pandemic control is essential not only to save lives but also to accelerate economic recovery, which is now tenuous and uneven across MENA. Stressed health systems and lagging vaccinations in many middle-income and low-income countries in the region are harbingers of downside risks.” said Roberta Gatti, World Bank chief economist for the Middle East and North Africa region.

On the region’s healthcare system, the report showed that that MENA’s public health systems were not only ill-prepared to absorb the shock of the pandemic, but that authorities had previously painted an overly optimistic picture in self-assessments of their health systems’ preparedness; a situation the report attributes to “overconfidence.”

In this regard, the report urged making improvements in data transparency for public health that can help countries not only address perennial healthcare needs but also prepare for future health emergencies.

“The current underinvestment in public health systems thus needs to be urgently addressed by prioritizing investments on core public health functions within public sector budgets, the report concludes,” the report said.




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