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XINHUA NEWS SERVICE REPORTS FROM THE AFRICAN CONTINENT

 
Harvard report ranks Egypt third fastest
growing economy in coming decade

By Mahmoud Fouly CAIRO Egypt (Xinhua) -- A recent Harvard report has ranked Egypt as the world’s third fastest growing economy in the coming decade after India and Uganda.

The Global Growth Projections report, which was released by the Center for International Development (CID) at Harvard University on Thursday, expects Egypt’s annual economic growth to reach 6.63 percent by 2026.

In Africa, Egypt is ranked second after Uganda. The annual economic growth is forecast to hit 7.46 percent, according to the report.

“The growth projections are based on Economic Complexity, a single measure of each country’s economy which captures the diversity and sophistication of the productive capabilities embedded in a country’s exports,” said the report.

“Actually, Harvard’s report is even below Egypt’s desired growth that is taking good steps according to all indicators,” Rashad Abdo, an economics professor at Cairo University and head of the Egyptian Forum for Economic and Strategic Studies, told Xinhua.

Achieving the 6.63-percent annual economic growth is easily manageable in normal circumstances considering Egypt’s improving security conditions and recovering tourism sector, he explained.

Moreover, the ongoing economic reform in Egypt has led to the improvement of the country’s economy with expectations of higher growth by world financial institutions including the International Monetary Fund (IMF).

“The economic reform program surely has its effect on the growth rate, in addition to the pro-investment legislations such as the new investment law that provides massive incentives to foreign investors in Egypt,” Abdo said.

In an annual report released on Wednesday, the IMF expected Egypt’s economic growth to reach 5.2 percent in the 2017-18 fiscal year compared to 4.2 percent last year, and further accelerate to hit 5.5 percent in the 2018-19 fiscal year.

“The outlook for Egypt has improved relative to the October 2017 forecast. In the context of its IMF-supported program, improving confidence is boosting private consumption and investment, adding to the increase in exports and tourism,” said the IMF May 2018 report, entitled “The Middle East, North Africa, Afghanistan, and Pakistan Regional Economic Outlook.”

Over the past few years, Egypt has been struggling to overcome an economic recession resulting from political turmoil and relevant security challenges.

In late 2016, the country started a strict three-year economic reform program including austerity measures, energy subsidy cuts and tax increases, in addition to local currency floatation to contain the shortage of U.S. dollar.

Despite the negative consequences of price hikes and higher inflation, the liberalization of the Egyptian pound’s exchange rate encouraged the IMF to support Egypt’s economic reform by a 12-billion-dollar loan, half of which has been delivered to the North African country.

The reform program has positively reflected on the general performance of the Egyptian economy and led to more confidence in the country’s investment climate.

“The security and stability conditions are getting better, luring more tourists and foreign investors. In addition, the local currency devaluation also attracts foreign investors,” Abdo said.

The Egyptian professor pointed out that the tourism sector, which is a main source of national income and hard currency, is improving as the Russian direct flights to Egypt started to return after more than two years of suspension.

A delegation from the IMF arrived in Cairo late Friday to review Egypt’s economic reform progress, ahead of delivering the fourth installment of the 12-billion-dollar loan, which is worth 2 billion dollars.

Earlier in the day, Egyptian Finance Minister Amr al-Garhy said the country’s economy is maintaining the momentum of steady growth, noting that it aims to achieve the sustainable growth rates of between 6 and 7 percent.

           

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