Egypt economic monitor: the far-reaching impact of government digitalization
The Egyptian economy continues to show the resilience it has displayed throughout the COVID-19 pandemic, due to the macroeconomic and energy sector reforms it has implemented in recent years, along with measures taken to ease monetary conditions, provide selected sectoral support, and mobilize external financing. Real GDP growth and foreign income activities started recovering in Q4-FY2020/21. However, global COVID-related challenges and an uneven recovery across the world continue to restrain the rebound. Foreign reserves remain ample, but the widened current account deficit has increased financing requirements. Fiscal consolidation has helped bring down the budget deficit-to-GDP ratio. Yet, the fiscal space remains constrained by the interest burden and below-potential revenue-mobilization. Egypt is expected to resume pre-pandemic growth in FY2021/22 under the baseline scenario that the COVID-situation gradually improves. Further advancement of structural reforms is critical to sustain recovery, drive productivity growth, and generate high-earning job opportunities. The Focus Chapter of this monitor is dedicated to the topic of government digitalization.