Being an emerging market, Egypt is expected to witness a real GDP growth slowdown from 2020 to 2024 to reach approximately 4.5 percent, down from five percent in 2015-2019, due to the COVID-19 repercussions, said Cedric Chehab, global head of country risk at Fitch Solutions.
In a webinar held by Fitch Solutions on Thursday to review its global macroeconomic quarterly update, attended by Ahram Online, Chehab said that Egypt is among the emerging markets whose fiscal deficits are expected to remain wide with about 10 percent of Egypt’s GDP until 2024, and to be the top country among emerging markets to suffer such deficits.
Chehab said emerging markets’ output will see a contraction by 1.5 percent in 2020, driven by lockdowns and declines in investment, consumption and trade.
He said emerging markets have turned their focus, amid the crisis, on monetary policies, which are much smaller programmed than in developed markets, with a focus on smoothing market variations, rather than large-scale asset purchases.
“While markets have not yet responded negatively, we see significant longer-term risks. Given weaker monetary institutions, and in some cases independence, excessive use of QE could lead to rising inflation in EMs and significant currency weakness,” Chehab illustrated.