International Monetary Fund (IMF) has lauded Egypt’s measures to address the impacts from the outbreak of the Covid-19 pandemic.
The growth impact of the Covid-19 crisis has so far been less severe than expected, as strong consumption helped offset weak tourism and investment, the IMF said in a report.
Measures taken to address the health and social needs and support the sectors most directly affected by the crisis appear to have helped mitigate the impact of the shock, it added.
It said that external market conditions have improved with a strong return of portfolio inflows since the approval of the Stand-By Arrangement (SBA).
It pointed out that consumption remained relatively robust, however, supporting modest growth in most other sectors.
“Thus, the decline was much less than projected at SBA approval in June, resulting in growth of 3.6 percent in FY2019/20 compared to the projected 2 percent,” it said.
It noted that the unemployment rate declined in Q3 of 2020 to 7.3 percent, accompanied by an increase in labor force, down from
9.6 percent in the previous quarter at the height of the lockdown.
It added that a primary fiscal surplus of 1.8 percent of GDP also beat expectations, reflecting savings on energy subsidies from lower oil prices and lower-than-planned transfers to the social insurance fund.
The IMF lauded the various government and Central Bank of Egypt (CBE) initiatives, combined with banks’ strong liquidity buffers, supported continued credit and domestic activity through the crisis.
