File Photo: Minister of Planning and Economic Development, Hala El-Said. (Photo: Al-Ahram)
The anticipated growth is attributed to the resilience shown by the Egyptian economy, which in turn is due to the expansion in public investments as one of the main drivers of growth, El-Said said in a meeting with President Abdel-Fattah El-Sisi on Monday.
In a separate meeting today with Prime Minister Mostafa Madbouly, El-Said said that the Egyptian economy continued to achieve a 4.4 percent growth during Q1 of the current fiscal year despite challenges posed by the Ukraine crisis, the pandemic, and effects of climate change.
She also shed light on the expected drop in global economic growth, noting that global trade is expected to decline to 2.5 percent in 2023 from 4.3 percent this year.
During the meeting, El-Sisi instructed to continue conducting deep studies of the global economic situation and how it reflects on the Egyptian economy and development process.
The president stressed that these studies should place strong emphasis on global inflation rates and the rise in food and energy prices in the light of both a global shortage and turbulence in international supply chains.
The continuation of such studies aims to sustain the gains made as a result of the economic reforms that have been implemented over the past years, El-Sisi added.
According to its World Economic Outlook report in October, the International Monetary Fund (IMF) has expected Egypt’s real GDP to grow by 4.4 percent in 2023 down from its July forecast of 4.8 percent.
In its report, The IMF forecasts global growth to drop to 2.7 percent next year from 6 percent in 2021 due to the war between Russia and Ukraine and the coronavirus pandemic, both of which have had an adverse impact on global economies.
Furthermore, in an October update, the World Bank expected the Egyptian real GDP to grow by 4.8 percent in the fiscal year 2022/2023.
Egypt and the global economic crisis
Egypt’s economy, like other economies worldwide, has been hit by the Russia-Ukraine crisis amid growing global inflation and rise in energy and food prices.
So far, the Central Bank of Egypt (CBE) has hiked the key interest rates by a total of five percent (500 bps) in 2022 to contain the inflationary pressure caused by elevated global inflation and the repercussions of the war in Ukraine.
The war in Ukraine has also applied pressure on the Egyptian currency, causing the country to apply two major currency devaluations this year which according to Reuters amount to 36 percent in total.
In addition, Egypt announced last month reaching a new $3 billion loan agreement with the IMF to help the country “meet the external obligations that were exacerbated as a result of the Russian-Ukrainian conflict,” according to CBE Governor Hassan Abdalla.
The new IMF loan is a testament to the stability of Egypt's economy, Prime Minister Mostafa Madbouly said in a press conference late in October.