Egypt's economy, North Africa's largest, is forecast to grow 2.3 per cent in the fiscal year 2020-2021 as it weathered the Covid-19 pandemic well, but deeper reforms are needed and a digital transformation process could help to raise productivity, the Institute of International Finance said.
The country will see growth moderate from 3.6 per cent in the last fiscal year, backed by accommodative monetary and fiscal policies and progress on pre-pandemic reforms, the IIF said in a report on February 10.
"Partial lockdowns and other restrictions may have less of a detrimental economic impact in the second half of the current fiscal year, as consumers and businesses have found ways to adapt and capitalise on the major progress made in digital transformation and FinTech," the report by the institute's chief Mena economist Garbis Iradian said.
However, the outlook is clouded by uncertainty, with risks depending on how the pandemic evolves, progress in vaccinations and whether the new coronavirus variants will trigger another surge in cases, it added.
The Arab world's third-largest economy was the only one in the Middle East and North Africa to avoid a contraction in 2020. Egypt had secured support from the International Monetary Fund, in the form of a Rapid Credit Facility and a Stand-by Arrangement, to boost health and social spending and to support the private sector.
The IIF expects Egypt's fiscal deficit to widen to 8.5 per cent of gross domestic product in the 2020-2021 fiscal year because of lower tax revenues and higher spending.
"Strong fiscal consolidation will be unavoidable once the Covid-19 crisis abates, to put public debt-to-GDP ratio back on a downward path," the institution said.
Its projections indicate that debt will edge up to 92 per cent of GDP by June 2021 and a minimum primary surplus of 2 per cent of GDP will be needed to reduce the debt.
Egypt's external funding position "warrants caution" as the country's current account deficit has widened and debt amoritisation will remain high in the coming years.
Revenue from tourism, which accounted for 10 per cent of GDP before the pandemic and is a key source of foreign exchange earnings, is projected to decline.
This drop in tourism income will widen the current account deficit to 4 per cent of GDP during the current fiscal year.
Estimates from the Central Bank of Egypt and the IIF suggest a plunge in tourism receipts from $7.4 billion in the first half of the 2019-2020 fiscal year to $1.1bn in the first half of this fiscal year.
Tourism is unlikely to recover fully before 2023 as pandemic-related travel disruptions are likely to continue for some time, the IIF said. However, remittance inflows from Egyptians abroad, a key source of foreign currency for Egypt, will remain broadly stable.
Foreign direct investment may continue to decline modestly to around $5bn and remain concentrated in the energy sector, though more FDI in manufacturing and the digital economy will be "sorely needed," the IIF said.
The institute expects Egypt to tap international debt markets to meet its financing requirements. Earlier this week, Egypt sold $3.75bn worth of bonds in an offer that was 4.4-times oversubscribed, the Ministry of Finance said in a statement.
Greater exchange rate flexibility may also help the Egyptian economy to better absorb the effects of further external shocks and improve competitiveness, with intervention limited to disorderly market conditions, the IIF said.
Looking ahead, the IIF said deeper reforms are needed for a post-Covid economic recovery.
Obstacles to local private sector investment need to be tackled while private sector participation in all sectors must be encouraged to reduce inefficiencies from relying on a few large players in the economy, it said.
The IIF also recommended that authorities look to reform public procurement to improve resilience, boost growth and deliver broader benefits for all citizens. This entails imposing reporting requirements for state-owned enterprises to improve transparency and financial disclosure.
It also recommended revising the competition law to support a level playing field for all stakeholders.
"Such reforms will raise total factor productivity (TFP) and boost the supply of highly qualified labour, which is needed to raise potential growth," it said.
Encouraging private investment, particularly in transportation and digital infrastructure, can also help to create more jobs and mitigate the domestic demand shocks due to the pandemic, which may have a long-term impact on Egypt’s growth trajectory, it said.
Still, the IIF said it is encouraged by the progress Egypt made in digital transformation, which could also improve competitiveness and raise the productivity of labour and capital.
SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
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UAE currency: the story behind the money in your pockets
The specs: 2019 Haval H6
Price, base: Dh69,900
Engine: 2.0-litre turbocharged four-cylinder
Transmission: Seven-speed automatic
Power: 197hp @ 5,500rpm
Torque: 315Nm @ 2,000rpm
Fuel economy, combined: 7.0L / 100km
UAE currency: the story behind the money in your pockets
New UK refugee system
- A new “core protection” for refugees moving from permanent to a more basic, temporary protection
- Shortened leave to remain - refugees will receive 30 months instead of five years
- A longer path to settlement with no indefinite settled status until a refugee has spent 20 years in Britain
- To encourage refugees to integrate the government will encourage them to out of the core protection route wherever possible.
- Under core protection there will be no automatic right to family reunion
- Refugees will have a reduced right to public funds
The%20Roundup
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COMPANY%20PROFILE%20
%3Cp%3E%3Cstrong%3ECompany%20name%3A%20%3C%2Fstrong%3ENomad%20Homes%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2020%3Cbr%3E%3Cstrong%3EFounders%3A%20%3C%2Fstrong%3EHelen%20Chen%2C%20Damien%20Drap%2C%20and%20Dan%20Piehler%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20UAE%20and%20Europe%3Cbr%3E%3Cstrong%3EIndustry%3C%2Fstrong%3E%3A%20PropTech%3Cbr%3E%3Cstrong%3EFunds%20raised%20so%20far%3A%3C%2Fstrong%3E%20%2444m%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Acrew%20Capital%2C%2001%20Advisors%2C%20HighSage%20Ventures%2C%20Abstract%20Ventures%2C%20Partech%2C%20Precursor%20Ventures%2C%20Potluck%20Ventures%2C%20Knollwood%20and%20several%20undisclosed%20hedge%20funds%3C%2Fp%3E%0A
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
German intelligence warnings
- 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
- 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
- 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
Libya's Gold
UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.
The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.
Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.
A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.
Match info
Bournemouth 0
Liverpool 4 (Salah 25', 48', 76', Cook 68' OG)
Man of the match: Andrew Robertson (Liverpool)
UAE currency: the story behind the money in your pockets
The specs
Engine: 2.0-litre 4-cylturbo
Transmission: seven-speed DSG automatic
Power: 242bhp
Torque: 370Nm
Price: Dh136,814
POWERWASH%20SIMULATOR
%3Cp%3E%3Cstrong%3EDeveloper%3A%3C%2Fstrong%3E%20FuturLab%3Cbr%3E%3Cstrong%3EPublisher%3A%20%3C%2Fstrong%3ESquare%20Enix%20Collective%3Cbr%3E%3Cstrong%3EConsole%3A%20%3C%2Fstrong%3ENintendo%20Switch%2C%3Cstrong%3E%20%3C%2Fstrong%3EPlayStation%204%20%26amp%3B%205%2C%20Xbox%20Series%20X%2FS%20and%20PC%3Cbr%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
Wicked: For Good
Director: Jon M Chu
Starring: Ariana Grande, Cynthia Erivo, Jonathan Bailey, Jeff Goldblum, Michelle Yeoh, Ethan Slater
Rating: 4/5
Zayed Sustainability Prize
The%20Mandalorian%20season%203%20episode%201
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3ERick%20Famuyiwa%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%20%3C%2Fstrong%3EPedro%20Pascal%20and%20Katee%20Sackhoff%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E4%2F5%C2%A0%3C%2Fp%3E%0A
Electric scooters: some rules to remember
- Riders must be 14-years-old or over
- Wear a protective helmet
- Park the electric scooter in designated parking lots (if any)
- Do not leave electric scooter in locations that obstruct traffic or pedestrians
- Solo riders only, no passengers allowed
- Do not drive outside designated lanes
Water waste
In the UAE’s arid climate, small shrubs, bushes and flower beds usually require about six litres of water per square metre, daily. That increases to 12 litres per square metre a day for small trees, and 300 litres for palm trees.
Horticulturists suggest the best time for watering is before 8am or after 6pm, when water won't be dried up by the sun.
A global report published by the Water Resources Institute in August, ranked the UAE 10th out of 164 nations where water supplies are most stretched.
The Emirates is the world’s third largest per capita water consumer after the US and Canada.
Tax authority targets shisha levy evasion
The Federal Tax Authority will track shisha imports with electronic markers to protect customers and ensure levies have been paid.
Khalid Ali Al Bustani, director of the tax authority, on Sunday said the move is to "prevent tax evasion and support the authority’s tax collection efforts".
The scheme’s first phase, which came into effect on 1st January, 2019, covers all types of imported and domestically produced and distributed cigarettes. As of May 1, importing any type of cigarettes without the digital marks will be prohibited.
He said the latest phase will see imported and locally produced shisha tobacco tracked by the final quarter of this year.
"The FTA also maintains ongoing communication with concerned companies, to help them adapt their systems to meet our requirements and coordinate between all parties involved," he said.
As with cigarettes, shisha was hit with a 100 per cent tax in October 2017, though manufacturers and cafes absorbed some of the costs to prevent prices doubling.
Dr Afridi's warning signs of digital addiction
Spending an excessive amount of time on the phone.
Neglecting personal, social, or academic responsibilities.
Losing interest in other activities or hobbies that were once enjoyed.
Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.
Experiencing sleep disturbances or changes in sleep patterns.
What are the guidelines?
Under 18 months: Avoid screen time altogether, except for video chatting with family.
Aged 18-24 months: If screens are introduced, it should be high-quality content watched with a caregiver to help the child understand what they are seeing.
Aged 2-5 years: Limit to one-hour per day of high-quality programming, with co-viewing whenever possible.
Aged 6-12 years: Set consistent limits on screen time to ensure it does not interfere with sleep, physical activity, or social interactions.
Teenagers: Encourage a balanced approach – screens should not replace sleep, exercise, or face-to-face socialisation.
Source: American Paediatric Association
'Nightmare Alley'
Director:Guillermo del Toro
Stars:Bradley Cooper, Cate Blanchett, Rooney Mara
Rating: 3/5
more from Janine di Giovanni
RESULTS
5pm Maiden (PA) Dh80,000 (Turf) 1,600m
Winner Thabet Al Reef, Bernardo Pinheiro (jockey), Abdallah Al Hammadi (trainer)
5.30pm Handicap (PA) Dh80,000 (T) 1,600m
Winner Blue Diamond, Pat Cosgrave, Abdallah Al Hammadi
6pm Arabian Triple Crown Round-1 Listed (PA) Dh230,000 (T) 1,600m
Winner Hameem, Adrie de Vries, Abdallah Al Hammadi
6.30pm Wathba Stallions Cup Handicap (PA) Dh70,000 (T) 1,400m
Winner Shoja’A Muscat, Szczepan Mazur, Ibrahim Al Hadhrami
7pm Maiden (PA) Dh80,000 (T) 1,200m
Winner Heros De Lagarde, Szczepan Mazur, Ibrahim Al Hadhrami
7.30pm Handicap (TB) Dh100,000 (T) 2,400m
Winner Good Tidings, Antonio Fresu, Musabah Al Muhairi
