Skip to Main Navigation

Egypt economic monitor : paving the way to a sustained recovery (Spring 2015) (English)

Egypt’s economic activity is gaining momentum. Growth accelerated to 5.6 percent during the first half of FY15, compared to a dismal 1.2 percent in the same period last year. The recent spike in economic activity reflects favorable base effects, but more importantly broad-based sector recovery, especially in tourism and manufacturing. On the demand side, growth continues to benefit from resilient consumption and government stimulus, supported by large financial inflows from Gulf States. In March 2015, Egypt held a high level Economic Development Conference, which culminated with the signing of sizeable investment deals worth US$36 billion, securing external financing worth US$24 billion, and the announcement of a new Gulf support package worth US$12.5 billion. This will boost the ongoing economic recovery and facilitate efforts to achieve macroeconomic stability. Annual growth is expected to double to 4.3 percent in FY15, and should increase further thereafter, compared to the muted growth of 2 percent during FY11-FY14. The International Monetary Fund (IMF) conducted its article four consultation in November 2014 and the final report generally commended the authorities’ medium term plans while highlighting some risks including slippage in implementing reforms and a large external financing gap. Egypt’s main risk is to sustain the ongoing economic recovery which requires improved security. Notwithstanding the authorities’ ambitious fiscal consolidation plan, the deficit and debt aggregates will remain high and unsustainable. Further, there are risks of policy slippage as some details and the exact timing of policy measures are still missing and implementation capacity remains a challenge. Further, sustaining the reform pace requires efficient and well-targeted safety nets, which might take time to build. Finally, there is significant uncertainty regarding the financing of the announced mega-projects and the potential contingent liabilities that may arise.

Details

  • Author

    Kouchouk,Ahmed Ashraf Aly, Alnashar,Sara Bahaa Hamed

  • Document Date

    2015/04/01

  • Document Type

    Working Paper

  • Report Number

    96946

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    Egypt, Arab Republic of

  • Region

    Middle East and North Africa,

  • Disclosure Date

    2015/06/02

  • Disclosure Status

    Disclosed

  • Doc Name

    Egypt economic monitor : paving the way to a sustained recovery (Spring 2015)

  • Keywords

    purchase of goods and services;interest rates on treasury bill;oil and gas company;high corporate tax rate;international price of oil;international oil price;Oil & Gas;Cost of Doing Business;domestic consumption of oil;impact of energy sector;net importer of oil;flexible exchange rate policy;private investment;special economic zone;balance of payment;effective tax rate;income tax rate;official exchange rate;net foreign asset;international oil company;Fuel Subsidies;corporate tax regime;special tax treatment;energy supply shortage;financial market participant;natural gas use;drag on growth;public investment spending;labor market condition;state of emergency;wages and salary;war on terrorism;taxes on goods;Social Safety Nets;external debt accumulation;low income group;international commodity price;fuel price increase;rigid labor market;high energy price;cost of production;external debt stock;black market premium;high poverty rate;income tax law;tier 1 capital;electricity and gas;education and health;house of representative;domestic energy production;medium term plan;barrel of oil;Access to Energy;continuous energy supply;oil import bill;long term gain;current account balance;foreign oil company;income tax regime;global financial crisis;natural gas grid;errors and omission;market for gas;source of energy;price of land;current account deficit;transmission system operator;electricity holding company;economic recovery;unemployment rate;energy subsidies;private consumption;high tax;fuel product;contingent liabilities;macroeconomic implication;contingent liability;merchandise import;external account;fiscal consolidation;terrorist attack;inflationary pressure;banking sector;budget deficit;monetary policy;alcoholic beverage;trade balance;high wage;business environment;energy shortage;oil sector;Job Creation;government expenditure;gradual restoration;electricity tariff;energy investment;sales tax;fiscal saving;financial difficulties;petroleum sector;reform effort;energy crisis;reform measure;higher growth;capital good;Oil Export;domestic asset;Real estate;baseline scenario;external financing;investment deal;policy slippage;government entity;inflation average;core inflation;external condition;official poverty;capital gain;investment procedure;trade deficit;gas cylinder;disposable income;government lending;foreign inflow;fiscal account;trade partner;tax system;domestic liquidity;macro framework;Public Infrastructure;minimum wage;outstanding debt;internal effort;inflation start;downside risk;social context;t-bill rate;lending rate;financial crunch;liquidity crunch;political uncertainty;sovereign guarantee;power developer;grain price;social dimension;government guarantee;macroeconomic indicator;Boosting Growth;inflation expectation;international market;energy availability;asset base;discount rate;human welfare;monetary situation;parallel market;short-term maturity;fuel export;government security;bank risk;capital adequacy;electricity sector;financial soundness;excessive consumption;production level;macroeconomic impact;unrecorded capital;deposit rate;oil product;public private;financial account;government issue;Wind Power;global context;future price;electricity law;transmission company;net inflows;tariff structure;tourism revenue;gas law;merchandise trade;Tax Evasion;tax payer;binding constraint;human skill;employment growth;skill development;debt repayment;ceteris paribus;vicious cycle;market demand;international transportation;imported oil;social condition;hard currency;international shipping;foreign exchange;transportation cost;international reserve;food price;consumer price;oil companies;political change;exploration contract;job opportunity;job opportunities;domestic debt;price outlook;labor participation;islamic state;proportional representation;net export;corporate profit;import increase;social spending;higher consumption;mining law;foreign company;price adjustment;euro zone;market entrant;sectoral growth;administrative measure

Downloads

COMPLETE REPORT

Official version of document (may contain signatures, etc)

  • Official PDF
  • TXT*
  • Total Downloads** :
  • Download Stats
  • *The text version is uncorrected OCR text and is included solely to benefit users with slow connectivity.

Citation

Kouchouk,Ahmed Ashraf Aly Alnashar,Sara Bahaa Hamed

Egypt economic monitor : paving the way to a sustained recovery (Spring 2015) (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/653461467986287791/Egypt-economic-monitor-paving-the-way-to-a-sustained-recovery-Spring-2015