The World Bank on Thursday said it expects Egypt’s economy to grow by 5.8 percent this fiscal year, slightly lower than the government’s target of 5.9 percent.
The World Bank raised its estimate for Egypt’s gross domestic product (GDP) growth in the last fiscal year by 0.1 percent to 5.6 percent. The country’s fiscal year begins on July 1.
“Egypt is sustaining its robust growth, fiscal outturns are improving, and external accounts are stabilizing at broadly favorable levels,” the institution said in its report.
The World Bank sees Egypt growing at 6 percent in the fiscal year 2020 to 2021, on the assumption that macroeconomic reforms continue, and the current business environment improves.
Egypt’s recent economic reforms have helped boost its growth, while reducing inflation and debt.
The World Bank has identified sectors such as gas, tourism, wholesale and retail trade, along with real estate and construction as the main drivers of growth.
However, the share of employed individuals remained “modest” at 39 percent of the working age population, indicating “weak” private sector job-creation, the institution said.
Credit extended to privately-owned businesses averaged only 22 percent of total domestic credit in FY 2019, marginally lower than the previous year.
“Resolving long-standing challenges will be key to achieve structural transformation towards a vibrant economy where the business environment is conducive for competition, and the private sector is capable of generating more and better jobs,” World Bank said.