EBRD sees Egypt's economy growing 4.9% in FY21/22

The European Bank for Reconstruction and Development (EBRD) expects Egypt's economic growth to accelerate to 4.9% in fiscal year (FY) 2021/2022, driven by a boom in the telecommunications sector, in addition to a growth in private consumption and investment and the return of foreign direct investment (FDI).

According to its latest Regional Economic Prospects (REP) report on Thursday, the bank said it raised its growth forecast for the southern and eastern Mediterranean (SEMED) region to 4.2% for 2021.

The recovery in economic activity is primarily boosted by a rebound in the agriculture and telecommunications sectors and limited growth in tourism and exports.

"The future economic rebound will depend on the strength of the global recovery, progress in the vaccination rollout, political developments, and the implementation of reforms to the business environment," the bank noted. 

Output in the SEMED region is projected to grow by 4.4% in 2022 on the back of growing economic activity, especially in Egypt and Morocco. 

In FY20/21, Egypt's economic growth slowed down to 3.3% from 3.6% due to a decline in manufacturing and tourism activities which offsets the economic activities of the wholesale and retail trade, construction, agriculture, and telecommunications sectors.

In the meantime, inflation fell to 4.5% in the year ended 30 June, below the Central Bank of Egypt's (CBE) target, but it started to pick up in the July-September period of 2021, averaging 5.9% year-on-year (YoY), due to increases in the prices of food and beverages.