A report issued by Citibank expects the Egyptian economy to recover to 5.4% during the next fiscal year, compared to 4.6% in the current fiscal year.
He said that the question that will remain in the medium term is to what extent the government will push growth to higher levels by implementing structural reforms, especially with the move towards privatization to encourage more investment in The agricultural and industrial sector, and this will support the efforts of financial consolidation by enhancing revenues.
He added: As well as strengthening the flexibility of the exchange rate in 2021, to benefit from historical lessons, and he explained that the slight contraction in the second quarter of 2020 reveals that the repercussions of Corona on the economy will be limited In addition to the expected recovery of the tourism sector in the second half of 2021, after developing the vaccine.
He added: This will be supported by higher consumption and some recovery in Suez Canal revenues against the background of higher global oil prices and infrastructure developments, and despite Citibank's expectation that the current balance deficit will decline during 2021, but he believes the need for increased tourist arrivals to show greater improvement.
He indicated that Egypt has easily succeeded in financing its external needs through international lenders, although access to these funds will be slightly more difficult in 2021, and requires more access to global financial markets. , In light of the reserves, despite recovering partially, but their levels are less than their peak in 2019 at $ 45 billion.
In light of the government continuing to reduce the budget deficit slowly and continuously, the focus will be on monetary policy. Therefore, the target framework for inflation expected to be announced by the end of 2020 is important.
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he added that, taking into account the significant rise in inflation following the exchange rate liberalization, reaching an inflation rate of between 6 and 12% was not difficult even with the central bank downgrade. Interest rates.
and pointed out that the framework, which represents a greater challenge at 6% with a narrower range, will confirm the central bank's commitment to launching a system based on inflation targeting, even if the scope of action is More interest cut is more limited.
He also indicated that this will have special repercussions on the exchange rate system, and by the end of 2020, and through the view of the Central Bank and the Monetary Fund, the pound is not valued more than its value , Expected to remain stable until the end of the first half of 2021.
The report stated that Egypt has gone through 3 growth cycles since 1980, which culminated in 1983, 1998 and 2008 and is now in the fourth cycle. Despite Citibank's expectations of a slowdown in growth this year, it is not. He believes that this will last, and that growth will resume in 2021 ....
