Egypt has been identified as the world’s third fastest growing economy – trailing only India and Uganda, by a recent Harvard report.
The annual economic growth of Egypt is expected to reach 6.63 percent by 2026 according to the Global Growth Projections report unveiled by the Center for International Development (CID) at Harvard University.
Uganda overtook Egypt in Africa. For Uganda, the report predicts a 7.46 percent growth in its annual economic growth.
“The growth projections are based on Economic Complexity, a single measure of each country’s economy which captures the diversity and sophistication of the productive capabilities embedded in a country’s exports,” said the report.
“Actually, Harvard’s report is even below Egypt’s desired growth that is taking good steps according to all indicators,” Rashad Abdo, an economics professor at Cairo University and head of the Egyptian Forum for Economic and Strategic Studies, said.
He explained that given the improving security conditions and recovering tourism sector of Egypt, it is possible for the country to achieve the 6.63-percent annual economic growth quite easily.
The various financial institutions of the world including the International Monetary Fund (IMF) believe that Egypt will clock higher economic growth primarily driven by the ongoing economic reform in the country which has enhanced the economic and business environment of the country.
“The economic reform program surely has its effect on the growth rate, in addition to the pro-investment legislations such as the new investment law that provides massive incentives to foreign investors in Egypt,” Abdo said.
The IMF expects Egypt’s annual economic growth rate to grow form the 4.2 percent clocked in 2016-17 to touch 5.2 percent in 2017-18, in its annual report. The agency also expects the growth rate to hold into 2018-19 when a rate of 5.5 percent is being expected to be achieved by the economy.
“The outlook for Egypt has improved relative to the October 2017 forecast. In the context of its IMF-supported program, improving confidence is boosting private consumption and investment, adding to the increase in exports and tourism,” said the IMF May 2018 report, entitled “The Middle East, North Africa, Afghanistan, and Pakistan Regional Economic Outlook.”
Ongoing political turmoil and security challenges have resulted in an economic recession over the past few years in Egypt and the country has been attempting to get out of it.
Egypt initiated a program of flotation of the local currency to manage the shortage of U.S. dollar in 2016 along with austerity measures, energy subsidy cuts and tax increases, as a part of its program for strict three-year economic reforms that included a number of austerity measures.
There has bene increased confidence of investors and the investment climate in the Egyptian economy which has seen some positive impact of the reform program.
“The security and stability conditions are getting better, luring more tourists and foreign investors. In addition, the local currency devaluation also attracts foreign investors,” Abdo said.
(Adapted from Xinhaunet.com)