Egyptian Economy 8 in years
Wednesday، 06 April 2016 11:23 AM
The Media Center of the Council of Ministers published a report that dealt with the statement of account of the Egyptian economy during 8 years proving its strength and flexibility in facing crises, in light of the successive crises hitting the economies of the world. The report indicated:
Over the past eight years, the Egyptian state has sought a national economy that enjoys competitive and flexible potentials, contributing to enhancing growth levels in various sectors and improving investment climate, through: -
A package of comprehensive reforms, and various investment incentives.
Continuing efforts to raise the efficiency of the labor market
* Backing the sources of foreign exchange
The state adopts development plans within a participatory framework between its various sectors and development partners internally and externally, which has formed the cornerstone of the ability to withstand the current global crises and challenges that have affected the various economies of the world, especially with the strenuous efforts exerted by the state to tackle the various negative economic and social repercussions. These efforts will be reflected in the international institutions' view on the Egyptian economy and its management of the risks arising from international changes, especially at the economic level.
The Egyptian economy achieved the highest growth rate in 14 years despite the repercussions of the Russian-Ukrainian crisis, as the economic growth rate exceeds the global growth rate expected to reach 3.2% in 2022, to achieve 6.6% in 2021/22, compared to 2.9% in 2013/2014 .
Gross domestic product at current prices increased more than 3 times, reaching 7.9 trillion pounds (initial statement) in 2021/2022, compared to 2.2 trillion pounds in 2013/2014.
It continued to Achieving low levels of the unemployment rate and reach the lowest rate in more than 30 years, to record 7.4% in 2021, compared to 13% in 2014, while the unemployment rate recorded 7.2% in the second quarter of 2022.
Containing the inflation rate within the targets of the Central Bank of Egypt is 7% (±2%) for the end of 2022, as it recorded 8.5% in 2021/2022, compared to 10.1% in 2013/2014, while the overnight deposit rates witnessed an increase in order to contain the inflation rate after the Russian-Ukrainian crisis to record 11.25% on 08/18/2022, compared to 9.25% on 17/7/2014.
Revenues and expenses
Maximizing revenues and controlling expenditures contributed to reducing the levels of the total deficit and government debt. With regard to public expenditures as a percentage of GDP, it amounted to 22.8% in 2021/22, compared to 32.9% in 2013/2014. The rationalization of expenditures has contributed to achieving a primary surplus in the general budget.
Revenues increased by nearly three times in 2021/22, compared to 2013/2014, but they decreased as a percentage of GDP for growing by a large percentage, reaching 16.7% in 2021/22, compared to 21.4% in 2013/2014.
The primary balance as a percentage of GDP witnessed the achievement of a primary surplus despite the primary deficit of the advanced economies achieving at a rate of 3.4% of GDP in 2022, as it recorded 1.3% in 2021/22, compared to recording a deficit of 3.9% in 2013/2014.
The total deficit of GDP in Egypt is less than the total deficit in emerging economies (not including the Middle East oil countries) reaching 6.6% of GDP in 2022, as it recorded 6.1% in 2021/22, compared to 12% in 2013/ 2014 .
Debt rates in Egypt are lower than international rates, as government debt as a percentage of GDP recorded 87.2% in 2021/2022, compared to 89.3% in 2013/2014, pointing out that the global government debt ratio of GDP in 2022 is expected to reach 94.4%, and the government debt ratio for advanced economies is expected to reach 115.5% of GDP in 2022.
Exchange rate liberalization policy
The exchange rate liberalization policy succeeded in achieving an accumulation of net international reserves, which amounted to $33.1 billion (initial statement) in July 2022, compared to $16.7 billion in July 2014, and the number of months of commodity imports covered by net international reserves reached 4.6 months (initial statement). ) in June 2022, compared to 3.3 months in June 2014.
The Egyptian pound turned from the worst performing currency in 2014 to the second best performing currency in the world against the dollar (the selling price), as the value of the Egyptian pound fell sharply, making it one of the ten worst performing currencies in the world during 2013, according to Bloomberg.
The exchange rate reached 7.18 pounds at the end of December 2014, and in September 2015, the Egyptian pound became overvalued with the depreciation of emerging market currencies - according to Bloomberg - and in the same month, the black market for the dollar returned after an 8-year hiatus - according to the Financial Times.
The exchange rate of the Egyptian pound was liberalized in November 2016, while it reached 18.38 pounds at the end of December 2016, while the Egyptian pound came in January 2020 among the best performing currencies in the world against the dollar during 2019, according to Bloomberg, and it reached 15.76 pounds at the end of December 2021. The dollar recorded 19.26 pounds on August 31, 2022, following the Ukrainian crisis that began in February 2022.
Foreign exchange sources
Sources of foreign exchange doubled, thus enhancing Egypt's external solidity, and Egyptian exports reached their highest level in 26 years, recording $47.1 billion in (July-May) in 2021/22, compared to $25.8 billion in (July-May) in 2013/2014. In addition, remittances from workers abroad recorded $31.9 billion in 2021/22, which is the highest level ever, compared to $18.5 billion in 2013/2014.
Suez Canal revenue
Suez Canal revenues recorded their highest level ever in 2021/2022, with a value of $7 billion, compared to $5.3 billion in 2013/2014, as well as the recovery of tourism revenues after successfully managing the Corona crisis, recording $8.2 billion (initial statement). In (July-March) 2021/22, compared to $3.4 billion in (July-March) 2013/2014.
Net foreign direct investment remarkably recovered despite successive crises, to record $7.3 billion (initial statement) in (July-March) 2021/2022, compared to $3.1 billion in (July-March) 2013/2014.