Egypt’s economy will need to address the same challenges it has been facing in the past few years and they include foreign currency scarcity, dwindling tourism revenues and a swelling budget deficit.
Since its formation in September last year, the current Egyptian government has been trying to reform the monetary policy and pursue borrowing from regional and international bodies to secure foreign currency.
Egypt’s budget deficit swelled to EGP96.7 billion in the first four months of the current fiscal year (started in July 2015), compared with EGP84.5bn in the same period of the previous fiscal year.
By the end of the current fiscal year, the government wants the deficit to stand at EGP251bn, equivalent to 8.9 per cent of gross domestic product from 11.5 per cent in the past fiscal year.
In a report by Al Ittihad, economists said the Egyptian tourism sector remains in crisis after the Russian jetliner crash over Sinai two months ago.
Available data reveal that the tourism sector, which contributes 19.5 per cent of the country’s gross domestic product, will not be able to achieve the targeted five per cent growth ratio for the current fiscal year.
In the 2014/2015 fiscal year, Egypt’s economy expanded by 4.2 per cent while the government aimed for five per cent for this year and the International Monetary Fund forecast growth at 4.3 per cent.
(EGP1 = AED0.47, at the time of publishing)