Monday Minutes: Economic Snapshot

Monday Minutes: Economic Snapshot

A summary of last week’s major macroeconomic updates and indicators brought to you on one page for your convenience.

May 25 to June 1 Coverage:

MPED stated that Egypt’s economic growth amounted to about 5% in Q3 2019/20 which is lower than the intended target before the COVID-19 crisis which was set at a growth rate of 5.8% by the end of FY 2019/20.

The industrial sector contributed 12.2% to the GDP in Q3 2019/20, meanwhile the wholesale and retail contributed 11.7%, petroleum sector, as well as the transportation and tourism sectors, contributed 5.9%, 4%, and 2.7% respectively, according to MPED.

The telecommunication sector’s contribution to GDP increased from 2.5% to 2.7% during Q3 2019/20, maintaining a positive and high growth rate of 15%, in addition to the refining industry which achieved a growth rate of 78%, MPED stated.

MPED reported that initial data on the labor force indicates an increase in the unemployment rate to 9.2% during the period from the end of March 2020 to the end of April 2020, as a result of the COVID-19 pandemic.

According to MPED, the inflation rate increased in April recording 5.9% compared to 4.6% in March and indicated that the average rate of inflation for the 10 months in FY 2019/20 amounted to 5.3% compared to 13.3% in FY 2018/19.

Non-oil trade deficit improved during Q3 2019/20 by 24%, as non-oil exports increased by 2.3% and non-oil imports declined by 39%, MPED reported.

The Ministry of Finance plans to increase the base personal tax exemption limit from EGP 8,000 to EGP 15,000  and create a low tax bracket rate of 2.5% for income earners of less than EGP 30,000. 

The budget for FY 2020/21 allocates EGP 5.7 billion for the social housing and EGP 3.5 billion for the natural gas delivery to households, Ministry of Finance reported.

The new budget targets reducing public debt to 83% of GDP, while maintaining an initial surplus by about 2%, and reducing the total deficit to 6.3% of GDP compared to 7.2% in FY 2019/20, according to the Ministry of Finance.

The Ministry of Finance stated that total public revenues are expected to increase to EGP 1.288 trillion in FY 2020/21 with an annual growth rate of 13.6% over FY 2019/20, and an increase in tax revenue by 12.6%.

Samsung plans to invest $84 million in Egypt over the next five years, where $23 million will be directed towards a new production line to assemble computers, according to the Cabinet.

CBE issued instructions to banks to add salaries and wages of workers for the industrial, agricultural, and contracting sectors to the credit facilities granted by the EGP 100 billion initiative with an 8% diminishing return.


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