Egypt: Growth expected to slow to 2% if Coronavirus pandemic continues till December

Egypt was expecting a growth of 3.5% in the fiscal year 2020-21, which starts in July. However, it could slow to 2% if the Coronavirus pandemic extends till December, country’s planning minister Hala Al-Saeed said in a statement on May 3. She added that the government had been targeting annual growth of 5.6% in the current fiscal year, but now has lowered its expectations to 4.2 per cent due to the crisis. 

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Egypt has till now reported  6,193 positive cases and 415 death due to the deadly virus. The Afro-Asian nation has already suffered major financial losses due to the pandemic.

On April 26, the country's offcials announced that they had asked the International Monitory Fund for financial assistance to deal with the economic fallout caused by the coronavirus. Neither Egypt nor the IMF specified the size of the one-year bailout loan, which Prime Minister Mustafa Madbouly reportedly said would include “a financial package alongside technical support.”

'1 in 3 Egyptians were already poor' 

Egypt has been under a partial lockdown since mid-March, with a curfew in place from 9 p.m. to 6 a.m. According to reports, schools, mosques, churches and archaeological sites have been closed across the nation, although many businesses remain open during the day.  With tourism and aviation at a standstill, the partial lockdown threatens the livelihoods of many of Egypt’s 100 million people. One in three Egyptians were already living in poverty before the outbreak, according to government figures.

Read: Egypt Asks IMF For 1-year Loan Amid Coronavirus Fallout

Egypt PM Madbouly told a news conference that the IMF loan would be a “proactive step” against potential repercussions on Egypt’s economy and protect foreign currency reserves, as well as to preserve the gains made during economic reforms in recent years.

Egypt secured a $12 billion bailout package from the IMF in 2016. As part of the reform program, the government floated the currency, slashed subsidies on fuel, services and utilities, and imposed a value-added tax.

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Image : AP