Egyptian economy to be 2nd largest Arab, African economy by 2022: IMF

CAIRO - 7 December 2021: Egypt’s Information and Decision Support Center (IDSC) published Tuesday a report that included infographics highlighting the expectations of the International Monetary Fund (IMF) that the Egyptian economy will become the second largest Arab and African economy during 2022, in a new international testimony to the continuation of the march of economic achievements.

The report indicated that the IMF’s expectations indicate an increase in total revenues as a percentage of gross domestic product (GDP), to record 18.6 percent in 2021/2022, 18.7 percent in 2022/23, 18.9 percent in 2023/2024, and 19 1 percent in 2024/2025.

The IMF also expected a decline in the total deficit as a percentage of GDP, to reach 7 percent in 2021/2022, 6.2 percent in 2022/23, 5.7 percent in 2023/2024, and 5.3 percent in 2024/2025, while it expected the continuation of achieving a primary surplus as a percentage of GDP, to reach 1.5 percent in 2021/22, and 2 percent in 2022/2023, 2023/2024 and 2024/2025.

On a related level, the Fund expected a decline in the current account deficit as a percentage of GDP, to record 3.6 percent in 2021/2022, 2.6 percent in 2022/23, and 2.4 percent in 2023/2024 and 2024/2025.  While the debt is expected to decline as a percentage of GDP, to reach 89.8 percent in 2021/2022, 87 percent in 2022/23, 83.4 percent in 2023/2024, and 79.9 percent in 2024/2025.

The report showed that the Fund expected a recovery in net international reserves as it expected that the total international reserves would record $44.1 billion in 2021/2022, $47.6 billion in 2022/2023, and $51.8 billion in 2023/2024, and $55.1 billion in 2024/2025.

As for exports of goods and services, the IMF expected their volume to reach $50.5 billion in 2021/22, $60.5 billion in 2022/2023, $68.9 billion in 2023/2024, and $75.4 billion in 2024/2025, while It is expected that the volume of tourism revenues will reach $8 billion in 2021/2022, $15 billion in 2022/2023, $20.8 billion in 2023/2024, and $25.1 billion in 2024/2025.

The Fund’s expectations indicate that net foreign direct investment will record $8.6 billion in 2021/2022, $11.7 billion in 2022/2023, $14.9 billion in 2023/2024, and $16.5 billion in 2024/2025. While he expected the Suez Canal revenues to record $6.6 billion in 2021/2022, $6.9 billion in 2022/2023, $7.3 billion in 2023/2024, and $7.6 billion in 2024/2025.

The report monitored the future expectations of the International Monetary Fund that the average growth rate of the Egyptian economy during the next 5 years will be the best in 25 years, at a rate of 5.6 percent during the years from 2021/2022 to 2025/2026, compared to 4.4 percent during the years from 2016 /2017 to 2020/2021, 3.2 percent during the years from 2011/2012 to 2015/2016, 5.2 percent during the years 2006/2007 to 2010/2011, and 4.2 percent during the years 2001/2002 to 2005/ 2006.

The report reviewed the development of economic growth rates, according to the fund, during the period from 2001/2002 to 2025/2026, where it was expected to record 5.2 percent in 2021/2022, 5.6 percent in 2022/23, and 5.7 percent in 2023/2024. and 5.8 percent in both 2024/2025 and 2025/2026.

The report pointed out that the growth rate was 2.4 percent in 2001/2002, 3.2 percent in 2002/2003, 4.1 percent in 2003/2004, 4.5 percent in 2004/05, and 6.8 percent in 2005/06 and 7.1 percent in 2006/2007, 7.2 percent in 2007/2008, 4.7 percent in 2008/2009, 5.2 percent in 2009/2010, and 1.8 percent in 2010/2011.

The growth rate recorded 2.2 percent during 2011/2012 and 2012/2013, 2.9 percent in 2013/2014, 4.4 percent during 2014/2015 and 2015/2016, and 4.2 percent in 2016/ 2017, 5.3 percent in 2017/2018, 5.6 percent in 2018/2019, 3.6 percent in 2019/2020 and 3.3 percent in 2020/2021.

As for the Fund's expectations at the Arab level by 2022, the Egyptian economy ranked second with a value of $438.3 billion, while the Saudi economy came in first place with a value of $876.1 billion, and the UAE economy came in third place with a value of $427.9 billion.

This comes while the Fund expected that Iraq’s economy will rank fourth in the Arab world for 2022, with a value of $226.6 billion, followed by Qatar’s economy with $180.9 billion, Algeria’s economy with $168.2 billion, Kuwait with $138.8 billion, Morocco with $132.6 billion, and Oman with $132.6 billion. $85.7 billion.

The Fund expected that Jordan's economy will rank tenth in the Arab world for 2022, with a value of $47.5 billion, followed by Tunisia's economy with $45.5 billion, then Bahrain's economy with $41.1 billion, Sudan with $37.8 billion, and Libya with $29.2 billion, Yemen with $20 billion, and Palestine with $18.8 billion.

In addition, Mauritania's economy ranked 17th with a value of $9.3 billion, followed by the economy of Somalia with $5.9 billion, Djibouti with $3.9 billion, and Comoros with $1.4 billion, noting that 2022 forecasts for the size of the economies of Lebanon and Syria are not available.

The report pointed out that the International Monetary Fund's expectations indicate that the Egyptian economy will be the second largest in Africa during 2022, with a value of $438.3 billion, compared to obtaining the third place in 2021 with a value of $396.3 billion.

As for the development of the size of African economies in 2021, the report showed that Nigeria's economy came first with a value of $480.5 billion, then the economy of South Africa with a value of $415.3 billion, while Algeria's economy came in fourth place with a value of $163.8 billion.

In the same context, Morocco's economy ranked fifth with a value of $126 billion, then Kenya's with $109.5 billion, Ethiopia with $92.8 billion, Ghana with $75.5 billion, Angola with $70.3 billion, and Tanzania with $69.2 billion.

The report also reviewed the Fund’s vision of economic reform policies and the strong performance of the Egyptian economy over the course of the coronavirus crisis, as the report quoted the Fund’s statements, saying that the structural reform plan that is being implemented aims to achieve comprehensive and sustainable growth led by the private sector to create permanent job opportunities and improve the resilience of the Egyptian economy to face external shocks .

The IMF also noted that the continued implementation of structural reforms is critical to ensuring continued spending on priority basic needs such as health, education and social protection, as well as emphasizing that deepening and expanding structural reforms will be necessary to meet the post-Corona challenges and unleash Egypt's huge growth potential.

It also reviewed the contributions of the reforms that have been implemented since 2016 in helping Egypt facing the unprecedented global instability that accompanied the Corona crisis with policies that achieved a balance between ensuring the continuation of the necessary health and social expenditures, maintaining the sustainability of financial flows and rebuilding cash reserves in addition to the  proactive economic policies have protected the Egyptian economy from many burdens of the Corona pandemic.