2016 will be a relatively positive year for the Egyptian economy, as the currency stabilizes and investment returns to the county. According to BMI research, the fiscal and net export position will improve significantly on the back of fuel subsidy reform. Subsidy cuts will likely be watered down if public unrest occurs on a significant scale, however, the bulk of reform will remain in place.
Hikes to domestic energy prices will push consumer price inflation back into the double digits by the end of the year.
Egypt’s geopolitical importance will ensure that even if an IMF agreement is delayed for longer than expected, further foreign aid commitments will materialize around the turn of the year. Western powers such as the US and EU have an interest in ensuring the North African country does not experience a more pronounced economic and political crisis. However, it will be donations from the GCC which keeps Egypt afloat this year.
Economic Activity (Egypt 2011-2019)
Indicator 2011 2012 2013 2014 2015e 2016f 2017f 2018f
Nominal GDP, USDbn 230.7 259.5 255.0 282.0 293.7 299.4 322.6 345.3
Real GDP growth,
% y-o-y 1.4 1.3 2.2 2.2 2.6 2.6 3.2 3.6
GDP per capita, USD 2,954 3,268 3,159 3,436 3,521 3,535 3,750 3,955
Population, mn 83.8 85.7 87.6 89.6 91.5 93.4 95.2 97.0