The Moody’s corporation anticipates the Egyptian economy to grow 4.4 percent by the end of the current fiscal year 2019/2020 which ends in June.
It cautioned that the economic consequences of the coronavirus may crystallize more clearly during fiscal year 2020/2021, with an expected decrease in economic growth to 2.7 percent if the virus continues to disrupt the tourism sector, investments and commercial activity.
In a Tuesday statement, Moody’s said that the economic reform measures implemented by the Egyptian government have brought in high growth rates, a major factor behind why the economy has remained strong against the coronavirus’s impact.
This thereby leads to less risks to the nation’s economy and its various social classes.
Moody’s stated that the Egyptian economy has succeeded in achieving an average growth rate of 5.4 percent during the past two years.
The reform program and move towards implementing business reforms such as in laws related to investment or bankruptcy alongside improving land allocation has helped grow and strengthen Egypt’s economy, Moody’s added.
The nation’s high economic growth rates have contributed to bringing the unemployment rate down to eight percent within the final quarter of 2019, approaching the lowest level in decades and strengthening Egypt’s ability to absorb the shock of the pandemic.
Moody’s anticipates that the inflation rate by the end of June will be 8.5 percent.
Egypt’s public debt fell to 84.2 percent of the GDP at the end of last year compared to 103.5 percent at the end of 2017, Moody’s noted, further expecting debt ratios to continue their decline even taking into account the coronavirus outbreak’s economic impact this year.
Moody’s hailed the Egyptian government’s preventive measures swiftly taken to combat the outbreak – even going as far as to ban flights and halt the tourism sector despite it being a major source of state revenue from foreign currencies with a total contribution of 12 percent of the GDP, and employing nine percent of the country’s total workforce.