Egypt was the only Middle East economy to grow last year amid the Covid-19 outbreak and its government was lauded for its swift policy actions to mitigate the pandemic’s effects.
And though its investment in infrastructure and job creation provides a good springboard for a strong rebound, more needs to be done on implementing reforms to ensure the economy, which relies on millions of tourists and remittances, is able to chart its way forward, according to analysts.
“Yes, Egypt has no restrictions, no lockdowns per se and that’s why it’s one of the few economies that continued to grow throughout the pandemic. But Covid is still disruptive,” said Mohamed Abu Basha, managing director and head of macroeconomic analysis & research at EFG Hermes.
Tourism, which accounts for 12 per cent of Egypt’s GDP, was heavily hit by the pandemic with the number of visitors plunging more than 72 per cent in 2020 to 3.6 million from the previous year.
“Aside from tourism, it’s impacting consumption, impacting mobility, impacting demand. So it’s taking a bit more time than initially envisaged to recover,” said Mr Abu Basha.