Egypt

Introduction

When COVID-19 struck Egypt, the economy was in a relatively good place: a three-year reform programme had reduced its deficits and inflation while raising its reserves. The government’s cautious fiscal response to the virus has helped maintain that stability – a policy that’s unlikely to change after autumn’s parliamentary elections. The country still faces lasting headwinds, including a struggling tourism sector.

But we believe this buffer will allow it to avoid a COVID-19-driven recession and return to pre-crisis levels of growth by 2021/22.

Overview

Our 2020 Navigator survey reflects cautious optimism in Egypt and a willingness to adapt

Although less upbeat than their peers in the MENAT region, a third of Egypt’s businesses are more optimistic about the future than last year. Looking ahead to 2021, the large majority anticipate revenue growth. Two-thirds are adapting to the changing environment brought on by the pandemic, compared with 61% in MENAT and 58% globally.

Close to eight in ten businesses expect to return to pre-COVID levels of profitability by the end of 2022. Despite difficult international trading conditions, which about half of businesses expect to carry on into 2021, almost nine in ten have a positive outlook on their international trade prospects over the next 1-2 years.

Nearly all show concerns about supply chains and have made changes. Sustainability is important for Egyptian businesses, with the majority having planned or set targets around environmental, social and governance issues.

Current status of business