COVER STORY
EGYPT’S STRENGTH IN ADVERSITY Growth Despite Covid-19 Headwinds |
T
here have been few economic success stories in 2020, a year when Covid19 took a wrecking ball to consumer spending and government budgets. Egypt, however, is one of a handful of countries that, while not unscathed by the pandemic, looks set to exit the year with its economy in growth mode.
EGYPT IN NUMBERS Population 104
million
3.5% GDP growth Land mass 1m km2 9.6% Unemployment World Bank 114 out Ease of Doing Business of 190 Index countries
Sources: IMF, CIA Factbook, World Bank
14 BREAKBULK MAGAZINE www.breakbulk.com
BY AMY MCLELLAN
While European nations battle unprecedented retrenchment, with the UK among those heading for devastating economic contraction, Egypt is expected to see growth of 3.6 percent. Indeed, according to the International Monetary Fund, Egypt’s economy achieved the second-highest global economic growth and was among only 15 percent of countries worldwide that achieved a positive growth rate worldwide in 2020. Given tourism is so vital to the Egyptian economy – directly and indirectly accounting for about 9 percent of GDP in 2019 – the country was expected to be hit hard by the pandemic. But instead, the country proved remarkably resilient, although growth was muted compared with pre-pandemic levels which had been predicted to deliver global domestic product growth of 5.8 percent in the fiscal year. In part, this is because the country, like so many others in Africa, was less hard hit by Covid-19 than expected. “Nine out of 10 people are wearing masks when they’re out and about, we’re teaching online and there are curfews on shops and restaurants,”
reported one resident of Cairo during the first wave. “People have taken it very seriously.” The country effectively crushed its first wave of infection, although there was a resurgence during the third quarter 2020 with cases running at about 400 a day in early December. In all, at the time of writing, there had been 6,666 deaths across the country at that time as a result of Covid-19, and the country ramped up enforcement of a mask mandate, curfews for shops and restaurants and 14-day quarantines towards the end of the year.
FULL STEAM AHEAD FOR RECOVERY
With the pandemic hopefully contained, there are hopes the momentum in the recovery will be sustained. The National Bank of Kuwait believes the worst economic repercussions of the pandemic are behind Egypt and that growth is expected to improve further over the first half of 2021. HSBC economists are also optimistic about the outlook, predicting growth of 2.5 percent in 2021. ISSUE 1 / 2021
