Local currency devaluation affects GDP growth in Egypt

“In countries where currency devaluations occur and inflation is high, it's hard to really track real growth because as inflation goes up the poor shoulder more and more burdens as they can't keep up with the rising prices”, the President of the World Bank Group (WBG) David Malpass told Ahram Online.

Malpass’ remarks came in response to a question by Ahram Online on his perception of recent economic developments in Egypt amid the ongoing global economic crisis.

He also noted that these circumstances create real challenges, adding that both the WBG and the IMF have worked closely with Egypt over the years to develop a program that would be more robust in terms of the private sector in the country.

Malpass also highlighted that the local currency depreciation has affected the real GDP growth of a number of countries, including Egypt. He added that this is a general problem in countries where debt is denominated in US dollars and where currencies weaken. These circumstances make both the debt burden and the debt service burden even more costly for the people of the country, according to Malpass. 

Ahram Online also asked Malpass about his perception of Egypt’s recent efforts to raise the private sector’s share in the local economic activity.