Egypt: Year in Review 2017

Egypt’s economy continued on an upward trajectory in FY 2016/17, posting growth of 4.2%, compared to projections of 3.5%, according to the IMF. Growth in the second half of the year, in particular, accelerated, expanding at an average rate of 4.6% at market prices – the fastest pace since FY 2009/10.

Tourism rebounds, expanding by 3.9%
A key contributor to the recovery of the economy was tourism, which is on the rebound following concerns over political stability and security. According to preliminary data from the Central Bank of Egypt (CBE), the sector recovered from a contraction of 25.5% in FY 2015/16 to post growth of 3.9% in FY 2016/17.

Growth has been supported not only by a higher number of arrivals from traditional source markets, such as Western Europe, but also visitors from new markets, including China and the Gulf, according to press reports.

The best performing sector in FY 2016/17, however, was communications, which recorded growth of 12.5%, followed by construction and transport, which expanded by 9.5% and 5.3%, respectively. Agriculture and manufacturing, traditional mainstays of Egypt’s economy, posted gains of 3.2% and 2.1%, while extraction industries declined by 1.8%.

An increase in investment flows also helped build momentum; net foreign direct investment reached 3.4% of GDP during the period, according to the Ministry of Finance (MoF).