Egypt's economy expected to rise by 5.4% in 2021: UN's report

CAIRO – 26 January 2021: Egypt’s growth domestic product (GDP) is expected to rise to 5.4 percent in 2021, according to the World Economic Situation and Prospects 2021 report issued by the United Nations (UN).

The report attributed the high growth is supported by the strong recovery of domestic demand and facilitated by the absence of severe balance-of-payments constraints.

It also estimated the GDP to be climbed by 0.2 percent in 2020.

“In terms of fiscal years, GDP growth is estimated at 3.5 percent for FY 2020, and for FY 2021, the forecast is 2.1 percent,” it stated.

It added that in Egypt, higher fiscal expenditures supported by foreign currency financing secured through multilateral institutions and an easing monetary stance helped prevent a contraction on a yearly basis in 2020. 

In its report, the United Nations warned that the devastating socio-economic impact of the COVID-19 pandemic will be felt for years to come unless smart investments in economic, societal and climate resilience ensure a robust and sustainable recovery of the global economy.

In 2020, the world economy shrank by 4.3 per cent, over two and half times more than during the global financial crisis of 2009. The modest recovery of 4.7 percent expected in 2021 would barely offset the losses of 2020, says the latest World Economic Situation and Prospects.

The report highlighted that sustained recovery from the pandemic will depend not only on the size of the stimulus measures, and the quick rollout of vaccines, but also on the quality and efficacy of these measures to build resilience against future shocks.

“We are facing the worst health and economic crisis in 90 years. As we mourn the growing death toll, we must remember that the choices we make now will determine our collective future,” UN Secretary-General António Guterres said.

“Let’s invest in an inclusive and sustainable future driven by smart policies, impactful investments, and a strong and effective multilateral system that places people at the heart of all socio-economic efforts.”

Developed economies, projected to see a 4 percent output growth in 2021, shrank the most in 2020, by 5.6 per cent, due to economic shutdowns and subsequent waves of the pandemic, increasing the risk of premature austerity measures that would only derail recovery efforts globally. Developing countries saw a less severe contraction at 2.5 per cent, with an expected rebound of 5.7 percent in 2021, according to the estimates presented in the report.