Cairo – Mubasher: Egypt’s gross domestic product (GDP) is expected to grow by 6.5% in fiscal year 2021/2022 from a projected 2% in FY20/21 as local activity starts to recover from the repercussions of the coronavirus (COVID-19) pandemic, according to a report by the International Monetary Fund (IMF).

“As the global crisis abates and macroeconomic stability is maintained, improvements in the fiscal and external positions are expected to ensure Egypt's continued market access and adequate capacity to repay,” the IMF said.

The country’s external debt is forecast to retreat to 21.8% of GDP in FY21/22 from a projected 23.8% in FY20/21. 

Moreover, the IMF also stressed that “progress on structural reforms is essential to unlock Egypt’s higher growth potential.”

The structural reforms are needed to encourage private sector participation, improve governance, and decrease corruption vulnerabilities.

“Prior to the COVID-19 pandemic, Egypt was one of the fastest growing emerging markets, having achieved macroeconomic stabilisation after a successful economic reform program,” backed by the $12 billion extended fund facility (EFF) during 2016-2019.

The IMF’s staff supported Egypt’s request for a 12-month $5.2 billion stand-by arrangement (SBA) “to address balance of payments financing needs arising from the COVID-19.”

The country’s performance will be monitored through semi-annual reviews and the first review is expected to be completed in December 2020.