Egypt economy forecast to grow 5.1% in year to June, 5.5% in 2022/23

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Updated 21 October 2021
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Egypt economy forecast to grow 5.1% in year to June, 5.5% in 2022/23

  • Tourism has been gradually recovering from COVID travel restrictions put in place in March 2020

Egypt's economy will grow 5.1 percent in the fiscal year that ends in June 2022, but accelerate to 5.5 percent in each of the following two years as tourism continues to rebound and the effects of the coronavirus pandemic wane, a Reuters poll showed.

The central bank said last month economic growth surged to 7.7 percent in the final quarter of the last fiscal year, indicating growth of 3.3 percent for the entirety of 2020/21, up from a previous full fiscal-year estimate of 2.8 percent.

Economists in a July poll predicted economic growth would be 5.0 percent for the year to next June.

"We expect consumption growth to pick up from a low base post-COVID and public investment to remain strong this year," Allen Sandeep of Naeem Brokerage said.

"What will be critical to see is if this growth is sustained in 2022/23, by when the pandemic effects should hopefully subside substantially."

Tourism has been gradually recovering from COVID travel restrictions put in place in March 2020.

Tourism revenue plummeted to $4.9 billion in 2020/21 from $9.9 billion a year earlier. But in the April to June quarter it bounced back to $1.75 billion from a low of $305 million in the same quarter of 2020, according to central bank data.

In the latest Reuters poll, economists expected annual urban consumer price inflation to climb to 6.0 percent in 2021/22, then picking up even further to 6.4 percent in 2022/23 and 7.0 percent in 2023/24, still within the central bank's target range of 5 percent to 9 percent.

Egypt's annual inflation rose to 6.6 percent year-on-year in September, its highest in 20 months, from 5.7 percent in August, mainly due to rising food prices, the state statistics agency CAPMAS said this month. read more 

The currency will weaken to 15.81 Egyptian pounds per dollar by the end of 2021, to 16.25 by the end of 2022 and to 17.24 by the end of 2023, the Oct. 8-20 poll of 22 economists showed.

The central bank is expected to leave its overnight lending rate unchanged at 9.25 percent throughout 2021/22 and 2022/23, then increase it to 10.25 percent by the end of June 2024, the poll found.

"We believe Egypt's sizeable CA (current account) deficit explains the central bank's reluctance to cut interest rates," causing a strong increase in imports and income outflows, RenCap's Yvonne Mhango wrote in a note.


Makkah sees rising economic activity ahead of Ramadan

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Makkah sees rising economic activity ahead of Ramadan

MAKKAH: Islam’s holiest city, Makkah, is experiencing heightened economic activity ahead of this year’s Ramadan, as markets, shopping centers, and hotels see a surge in visitors, reflecting the city’s dual religious and economic significance during the season.

A field survey by the Saudi Press Agency showed a marked uptick in retail and food sectors, with rising demand for staple goods, dates, Ramadan beverages, and hospitality and decorative items.

Traditional markets and modern shopping complexes have seen brisk activity from residents, expatriates, and visitors, supported by promotional offers launched by numerous businesses to attract consumers.

In the hospitality sector, early bookings for hotels and serviced apartments, particularly in the central area around the Grand Mosque, have increased, with occupancy expected to rise further in the first days of the holy month.

This surge is driven by the arrival of pilgrims and visitors from inside and outside the Kingdom to perform Umrah and prayers at the Grand Mosque.

Transport and logistics services have also been active, alongside intensified preparations by relevant authorities to ensure smooth traffic flow and easy access for worshippers.

Health and regulatory measures have also been strengthened to ensure food safety and service quality.

Ramadan remains one of the most important annual sales seasons, providing a wide range of options for various consumer segments. At this time each year, Makkah experiences a full seasonal economic cycle that supports small and medium-sized enterprises and boosts commercial activity.

The Makkah Municipality has confirmed that it stepped up inspections of markets and retail outlets across the holy city, as part of its field plan to ensure compliance with health and municipal regulations, product safety, and service quality.

Inspection teams, the municipality said, have conducted intensive rounds covering public markets, shopping centers, food outlets, industrial kitchens, and restaurants to verify food quality, storage methods, and hygiene standards, while ensuring establishments adhere to approved rules and regulations.

It added that that these monitoring campaigns continue around the clock, particularly during periods of heightened commercial activity.

The municipal authority also stressed the importance of citizens and residents reporting any concerns through official channels, strengthening community oversight and ensuring the highest public health and safety standards in line with Makkah’s status as a destination for millions of worshippers from within the Kingdom and beyond.

This growing economic activity highlights the vitality of Makkah’s market and its ability to respond to major religious seasons, reinforcing the city’s role as a spiritually and economically vibrant center and a global destination for Muslims during Ramadan.