Egypt Lowers GDP Growth Target for FY 2019/20 Amid Coronavirus Crisis

Business

March 27th, 9:49am

Cairo- Asharq Al-Awsat

The 2020/21 budget aimed to reduce the total deficit to 6.3%

Egyptian Minister of Planning Hala El-Saeed said on Thursday that the country’s targeted growth of GDP for FY 2019-2020 has been lowered to 5.1% from 5.6% due to the coronavirus crisis. Also, growth was expected to slow to 5.2% in the January-March 2020 quarter and 4% in April-June. She added that Egypt is also targeting 4.5 percent growth in FY 2020-2021, but it may drop to 3.5% if the coronavirus crisis continues until the middle of the fiscal year. Saeed, after holding a video conference with the cabinet, said inflation is expected to rise to 9.8% if the crisis continues until December, as demand for medical supplies, cleansers, and other products increases and as a lack of imported inputs hinders local production capacity. If the coronavirus crisis ends by end-June, the North African country could grow in the coming fiscal year by a quicker 4.5%, Saeed said. She said she expected an extended economic slowdown both in Egypt and internationally that would hurt the labor market. “There are sectors that will be severely affected by the crisis such as tourism, restaurants, and the entertainment industry,” Saeed said. Egypt, with a rapidly growing population that just topped 100 million, had been counting on high growth to absorb hundreds of thousands of workers who enter the labor force each year. Finance Minister Mohamed Maait, also speaking after the meeting, said the cabinet had approved the draft law of the FY 2020-21 budget. The 2020/21 budget aimed to reduce the total deficit to 6.3% of GDP and increase the primary budget surplus to 2%. This would result in public debt of 82.7% of GDP as of end-June 2021, he said.

from Asharq AL-awsat https://aawsat.com/english/home/article/2202281/egypt-lowers-gdp-growth-target-fy-201920-amid-coronavirus-crisis