Covid-19: A Strong Foundation for Speedy Recovery

The Egyptian Government has made key announcements in the past few days to mitigate an economic slowdown due to the ongoing disruptions caused by Covid-19. As the pandemic unfolds across the globe, the world GDP growth is now expected to decline to less than 1 percent from 2.9 percent in 2019. A slowdown in global growth and credit crunch across advanced economies is likely to have a ripple effect across emerging economies such as Egypt.

However, the fundamentals of the local economy remain strong. Egypt was one of the fastest growing economies in the region with a GDP growth of 5.6% in 2019. The country also managed to reduce its domestic debt to 66.7 percent from 2019 to Q1 2020 - its lowest rate in 10 years - due to the various economic reforms carried out by the Government. A young and educated population and rising household income should bode well for the economy in the long run.

The short-to-medium term impact on economic growth of Covid-19, cannot be overlooked. The Government has already suspended all international flights from the 19th of March till the 14th of April across all airports. It has also reduced the presence of public sector employees across government offices to stem the spread of virus. In addition, the Government has announced the implementation of a curfew which is in place for two weeks from March 25 between the hours of 7 pm and 6 am.

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