Egypt Year in Review 2015

The first part of the year saw a range of encouraging developments, including the completion of the strategically vital Suez Canal expansion, the commitment of more than $35bn in planned foreign investments, closer economic ties with Gulf allies and promising activity in the fast-moving consumer goods (FMCG) sector.

The Egyptian economy is expected to continue growing at a steady pace in the coming months, with key sectors, such as manufacturing and ICT, looking particularly promising.

However, headwinds from a jittery global economy present significant downside risks, and structural domestic challenges – including a fiscal deficit and stubborn poverty and unemployment rates – remain.
Growth prospects

Egypt’s GDP grew by 4.2% in 2015, according to the IMF, up from 2.2% in 2014 and marking the first year of a return to pre-2011 growth levels. Looking ahead, the fund expects GDP to expand by 4.3% in 2016 before scaling up to 5% by 2019. The World Bank has issued slightly lower projections, forecasting 3.8% growth in FY 2015/16, down from its previous estimate of 4.5%.

One of the major highlights of the year was the Egypt Economic Development Conference (EEDC), held in March. At the event, Egypt secured investment contracts worth around $36.2bn, along with an additional $18.6bn in infrastructure contracts to construct power plants.

The pledges at the EEDC were a combination of aid and investment, according to media reports, with much of it from Gulf Cooperation Council (GCC) member states.

The UAE pledged $2bn in investment and $2bn in deposits to the Central Bank of Egypt (CBE), while Saudi Arabia promised $3bn of investments and $1bn in central bank deposits. Kuwait, meanwhile, pledged $4bn in investment, and Oman offered $500m, to be split evenly between aid and investment, over the next five years.