CAIRO – 13 November 2018: The European Bank for Reconstruction and Development (EBRD) reviewed the Egyptian economy in its latest report “Transition Report 2018/2019”, stating that growth continued to accelerate for the fifth consecutive quarter.
“It reached 5.3 percent year-on-year in the second quarter of fiscal year 2017/18, and an estimated 5.3 percent for the year, the highest rate in a decade,” the report said.
The report attributed the hike to manufacturing, trade, tourism and construction, in addition to the recovery in mining.
“In per capita US dollar terms, GDP shrank in fiscal year 2016-17, as a result of the currency depreciation and sustained population growth, and increased by 5.0 percent in fiscal year 2017-18,” the report read.
Regarding Unemployment, the report said that the rate dropped for the seventh consecutive quarter but remained elevated at 9.9 percent in the second quarter of 2018, and higher among the youth (24.8 percent) and women (21.2 percent).
The report clarified that the continued moderation in the unemployment rate is mainly due to the bold reforms implemented in late 2016 and throughout 2017, which have boosted export-oriented businesses and improved the economic outlook.
“The government has also launched large construction projects that have generated many jobs,” the report stated.
The report also outlined inflation, noting that it declined from its record high level of 33.0 percent in July 2017 to 16.0 percent in September 2018.
“Meanwhile, in January 2018, the real interest rate turned positive for the first time in almost two years, and continued to increase, supported by the decline in inflation, despite the easing of monetary policy which started in February 2018,” according to the report.
EBRD said in its report that the fiscal and external positions have improved, stressing that the government achieved its first primary budget surplus in 15 years of 0.2 percent of GDP in fiscal year 2017-18, and the overall fiscal deficit narrowed to 9.8 percent of GDP (slightly below the target of 9.0 percent) from 10.9 percent in fiscal year 2016-17.
The report clarified that the deficit declined as a result of a contained wages bill and lower interest payments, coupled with a continued strong tax performance, despite increases in spending on subsidies and transfers.
“Gross public debt declined from 103 percent of GDP in fiscal year 2016/17 to 92.5 percent of GDP in fiscal year 2017/18,” the report noted.
It also pointed to the current account deficit which dropped from 6.1 percent of GDP in fiscal year 2016/17 to 2.8 percent in fiscal year 2017/18, as a result of the strong pick-up in tourism receipts, exports (oil, non-oil), Suez Canal revenues, and private transfers, notably remittances, which more than offset increases in imports.
It continued the review by saying, “In recent months, Egypt has stepped up external borrowing and shifted away from costly short-term domestic debt to rebuild foreign exchange reserves, and reduce crowding out of credit to the private sector.”
International reserves rebounded to surpass pre-2011 levels, reaching a record high of $44.5 billion in September 2018, and covering close to 7 months of imports, up from a critically low level of 3.1 months in June 2016, according to the report.
The bank expected GDP to grow to 5.5 percent in fiscal year 2018/19 and to 5.8 percent in fiscal year 2019/20.
It noted that this acceleration will be supported by the continued boost in confidence, recovery in tourism, an increase in foreign direct investment, improved competitiveness and continued strengthening of exports, the start of natural gas production from the Zohr field, as well as the implementation of business environment reforms and prudent macroeconomic policies.
The report also anticipated GDP to continue its growth in the short term in nominal dollar terms.
“The main risks to the outlook arise from a slow-down in reforms, and increases in global oil prices which would delay fiscal consolidation. These risks are mitigated by the authorities’ strong commitment to, and ownership of, the economic reform program,” the report explained.
According to the bank, “The Transition Report 2018-19” analyses the impact on work of demographic change, as well as automation and migration, both across national borders and within countries. The report includes a macroeconomic overview of the EBRD regions and of structural reforms in the past year.
Egypt embarked on a bold economic reform program that included the introduction of taxes, such as the value-added tax (VAT), and cutting energy subsidies, with the aim of trimming the budget deficit.
Egypt also provides facilities and legislative reforms to encourage investors to invest in Egypt.
The legislative and regulatory aspects include the issuance of several laws and regulations, namely the new investment law and its executive regulations; the law of restructuring and reconciliation, bankruptcy and postponement of financing and privatization; and the amendments of the law of companies and the capital market and their executive regulations.
The state also established the investors’ service center that provides services to aid in the procedures of establishing a firm, its contract, documentation, licensing and its commercial registration.
“People to People” campaign: because there’s more to Egypt
The new “People to People” campaign takes a new turn in promoting for tourism in Egypt, under the supervision of Minster of Tourism Rania Al Mashat who decided to take campaigning in another direction.
While other campaigns focus mainly on the sites and history of places, Al Mashat believes that the people of the country should be seen and heard. They should be given the chance to speak out loud about their own culture, and to reflect the Egyptian heritage.
Al Mashat stated that the choice for the slogan “People to people” is because it starts with the letter P, which stands not only for people, but also peace, passion, pride, and progress. All the keywords that should be associated with the Egyptians in the minds of tourists. And an attempt to change any false stereotypes or assumptions about Egypt, the minister also referred to the many visits of international celebrities which also reflects a positive image to the world about the safety of Egypt.
Another important thing to highlight is the Grand Egyptian Museum and how it is set to be the largest museum in the world; thus being another major mean in promoting for tourism.
In order for the campaign to move forward, Al Mashat explained that it will be divided into three pillars, the first one will focus on promoting for destinations, the second is the “People to People” campaign, where the focus will shift to people and correcting the false perceptions. The third and last will shed the light on the Grand Egyptian Museum that is set to open in the year 2020; which we hope to be Egypt’s way towards creating worldwide anticipation and promotion for tourism.
Egypt’s population hits another risky rate
Egypt’s population hits an increase of 70% in comparison to 2015, Hala al-Said -Minister of Planning and Administrative Reform- announced that it is estimated that Egypt’s population will reach 150 million by the year 2050; seeing how birth rate has been rising since 2005 and that makes Egypt one of the highest population growth rates in the world.
Overpopulation puts the national security at risk and is considered now to be a huge issue that need to be controlled by different parties. She also stated that the government is looking forward to investing in human resources in the light of this issue, and that the constitution encourages the execution of sustainable development goals.
In a press conference that was held last Sunday by Minister of Social Solidarity Ghada Wali, it was announced that the government is working towards renovating 33 clinics that provides contraception services under the framework of the project “Two are Enough”, that aims at limiting the growth rate of population.
“Two are Enough” aims at training nurses and physicians on the area of overpopulation, and offers bonuses for volunteers who work in raising awareness in Upper Egypt which is recorded to have the highest birth rates.
Female rural leaders are also trained to advice their fellow female villagers on the issue and its risks. More than 2,000 female leaders are reaching out to villagers in their homes and the target –as a start- is to visit more than 10,000 houses in different 10 governorates across Egypt.
The campaign will carry on raising awareness through radio episodes that are to be aired on Quran channels with the cooperation of Al Azhar and Dar al-Ifta.
We hope that such tactics can actually have an impact on the mindsets of people in rural areas, and that we can witness results in the upcoming few months.
Unearthing more of Egypt’s legacy
Discoveries of Egypt’s treasures continues
Missions continue to discover Egypt’s hidden treasures
Minister of Antiquities Khaled Al-Anani announced on Wednesday that more than 200 Italian archaeological missions are working on unearthing the treasures that still lays in different sites across Egypt, and that was during the inauguration of the second conference of the Italian Archaeological missions in Egypt, the middle East and North Africa.
The conference titled “Italian Archaeology in Egypt and MENA Countries (IAM2)” was held in the ministry’s office at Ahmed Pasha Kamal Hall in Zamalek, and secretary general of the Supreme Council of Antiquities, Mostafa Waziri attended along with the Italian Ambassador to Egypt Giampaolo Cantini and other officials.
Several discoveries took place during this archeological mission, sites included Karnak Temple, Saqqara, Minya and Dahshour. During the conference, details covering those discoveries were discussed.
Another important issue that was discussed during the conference is the necessity of restoring the smuggled artifacts from Egypt. The issue was welcomed by the Italian authorities and they expressed their complete support of the case.
We hope that such a collaboration will indeed help in uncovering more of Egypt’s legacies just in time with the Grand Egyptian museum, in order to highlight and showcase those discoveries.
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