Green shoots in the economic outlook of Egypt is visible with the economy recording positive growth in January–March from the prior period supported by higher government consumption. Government’s fiscal accounts reflected a sharp rise in spending in July–March compared to the same period a year earlier. Fixed investment also reported an increase, as a large chunk of the government’s extra spending went on public investments. Higher public wages, lower unemployment rate and a moderation in inflation also seem to have triggered private spending. For the first time in eight months. the non-oil private sector PMI rose above the 50-point mark in April. The Egyptian pound also strengthened in recent weeks on solid economic dynamics. At the same time, the IMF announced on 17 May the remaining USD 2 billion of the Egyptian government’s USD 12 billion financial support program.
The economy is expected to accelerate next fiscal year, which starts in July. However, weak government finances, uncertain global trading environment, and internal security problems threaten the outlook.
