Egypt aims to raise GDP by 1% annually: Minister of Planning

CAIRO – 19 April 2018: The Egyptian government aims to raise the gross domestic product (GDP) by 1 percent annually, according to Planning Minister Hala el-Saeed.

Saeed added on Thursday that the government targets to reach a GDP of 8 percent in the medium-term plan to meet the population rate; the population increases by 2.5 million people per year.

Egypt’s growth rate exceeded the expectations of international organizations by recording 5.2 percent and 5.3 percent, the minister said, adding that Egypt is targeting a growth rate of 5.8 percent.

The International Monetary Fund (IMF) expected that Egypt will record a gross domestic product (GDP) of 5.2 percent in the current fiscal year and to reach 5.5 percent next year, with an increase of 0.7 percent and 0.2 percent, respectively.

The IMF further anticipated the GDP to record 6 percent in 2023.

The minister pointed out that Egyptians paid the price of the economic reform because it was not just a painkiller; it was a real reformation to the situations in Egypt.

She added that the effect of the reforms started to decline as the inflation rate decreased to 13.1 percent from 33 percent.

The Central Agency for Public Mobilization and Statistics (CAPMAS) announced that annual consumer price inflation slipped to 13.1 percent in March 2018, compared to 32.5 percent in the same month of 2017.

About 66 percent of the growth rate is driven by investment and government expansion in public investments, unlike last years when investment was led by consumption, the minister said.

Egypt had embarked on a bold economic reform program that included the introduction of taxes, such as the value-added tax (VAT), and cutting energy subsidies, all with the aim of trimming the budget deficit.

The country also floated its currency in November 2016 before clinching a $12-billion loan from the IMF. The IMF’s executive board approved in November 2016 a three-year Extended Fund Facility (EFT) loan to Egypt worth $12 billion to support its economic reform program.

In December 2017, Cairo received the third tranche of this loan, worth $2 billion, bringing total disbursements to $6.08 billion.

The fourth tranche, also worth $2 billion, will be received after concluding the program’s third review in June.