22 July 2020; MEMO: Egypt’s economic growth will slow to 3.1 per cent in the 2020/2021 fiscal year, according to a Reuters poll.
Growth is down due to the country’s coronavirus pandemic, which has negatively affected tourism revenues.
As the price of gas has fallen, expat Egyptians living in the oil rich Gulf states have sent fewer remittances back home.
According to the report, if coronavirus continues until the end of this year growth could slow to two per cent in contrast to the expected 3.5 per cent.
The economic repercussions of the coronavirus pandemic have been huge for Egypt, whose economy was already struggling.
Abdel Fattah Al-Sisi has mishandled the economy, which has plunged the country into serious debt.
The general turned president has authorised projects many see as pointless, including developing the Suez Canal and building a new administrative capital, whilst many Egyptians can’t afford to eat.
Critics say he is trying to win political favour through these mega projects and create an impression that the Egyptian economy is thriving, whilst draining billions of pounds and sinking the country further into debt.
Last year the Egyptian whistleblower Mohamed Ali exposed corruption at the highest levels of the government and shared details about the money that was being spent on building lavish palaces for the president and his wife.
Electricity and petrol prices have been raised.
Egypt recently obtained two loans from the International Monetary Fund (IMF), one worth $2.77 billion and the other worth $5.2 billion.
Less than four years ago, Egypt already borrowed another $12 billion from the IMF.
The IMF has warned of the financial risks of Egypt’s high debt, coupled with the coronavirus pandemic, and the local and global economic turmoil that has followed.
The monetary fund has said that public debt in Egypt is expected to reach 93 per cent of its GDP by the end of the 2020/2021 fiscal year and that Egypt needs to work to reduce it.
