As COVID surges in Europe, officials warn of 'twindemic' with flu    'It's important to show our ingenuity': Nigerian collector promotes local artistic heritage amidst Black Lives Matter    Emotional Suarez proud to have thrived alongside Messi as he heads to Atletico    Deadline for reconciliation requests in building violations extended to end of October: Egypt's PM    UAE, Israel discuss energy, infrastructure cooperation    Greece says to resume exploratory talks with Turkey    EgyptAir receives 11th Airbus A220-300 from Canada    Russia to supply 17 more countries with COVID-19 drug Avifavir    Portland police declare riot during protests after Breonna Taylor ruling    PSG's Di Maria banned four games for part in brawl    Tennis: Paire says he played in Hamburg despite testing positive for COVID-19    Unusually heavy rains in Senegal expose big gap in $1.4 bln flood plan    Egypt detects 121 new coronavirus cases; 16 fatalities on Wednesday    3 policemen, 4 prisoners killed in Cairo jailbreak attempt    Last-minute bids    Wust El Balad band gives a concert at the Fountain theatre    Khan Almaghraby gallery group exhibition is a must go    A farrago of Brotherhood lies    Egyptian insurance companies' premiums 9.6% up in five months    Egypt's President Sisi names new head of anti-corruption watchdog    Egypt's offers 18 bln pounds T-bills on Sunday    EgyptAir offering discounts for some international flights    Egypt records 212 new coronavirus cases, 14 deaths on Saturday    Egypt to require PCR coronavirus tests for airport travelers    Egypt sends 125 tonnes of glass by sea to Beirut    Legend Messi officially wants to leave Barcelona, hands transfer request    Global smartphone sales drop 20% in Q2, yet Apple's iPhone sales steady    Sisi: Egypt keen on establishing development projects with Iraq, Jordan    Egyptian megastar Amr Diab releases new hit music video    Making of Harry Potter will be available for fans at new park in Tokyo    Egypt's Senate elections official results to be announced Wednesday    Netflix Egypt is bringing megastar Amr Diab back with a new original    Egypt reopens Rafah border crossing for first time since April    Egypt's senate elections 2020 trending on social media in few days    African Champions League final will be played on Oct. 16-17, CAF says    No room to delay Egyptian Premier League games – EFA's board member    The Facebook Preacher's Search for Fame, and Egypt's Economy    Egypt calls on UNSC to address oil spill risks off Yemen coast    Egypt economically strong in face of COVID-19, reforms ongoing: International Cooperation Minister    Arafa Holding reports $144,000 COVID-19-related losses in April    Egypt's efforts in Libya to activate free will of Libyan people: Al-Sisi    Hyksos campaigns were internal takeover, not foreign invaders: study    COVID-19 affects Egypt sporting clubs    COVID-19 will soon turn to seasonal like swine flu: Presidential Health Advisor    ‘Egypt's Support' coalition convenes to discuss its Senate election list    Robbery attempt leads to discovery of Ptolemaic monuments in Qena    Flouting international guidance, Ethiopia unilaterally starts filling its Nile dam    Zaha speaks out after online racial abuse    

Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.

Economy survives Covid-19
Published in Ahram Online on 08 - 09 - 2020

More than two months have passed since Egypt began to lift the restrictions in place to stem the spread of Covid-19 and gradually began reopening businesses. Life is, to a great extent, back to normal. People are catching up not only with family and friends but running errands that had been put off for more than three months. Noha Mohsen, 51, had been wanting to do her annual mammogram but was worried about the risk of coronavirus infection at medical scanning centres. This week her doctor told her to try to go through with it while coronavirus infection levels are low as there are fears there will be a resurgence in numbers when winter approaches. On Monday, 178 new infections were reported and 11 deaths.
“Covid-19 patients currently suffer mild symptoms that can be treated at home. Everyday there are new Covid-19 patients but the numbers are much lower now than the beginning of the wave,” explained pulmonologist Khairiya Ebeid.
The government, just like the public, is catching up on various projects, with the aim of propping up economic growth. Egypt's economy grew at 3.5 per cent in fiscal year 2019-20, Minister of Planning Hala Al-Said said last Thursday during the weekly cabinet meeting. Growth would have come in at less than two per cent if the government had not intervened to support the economy, Al-Said added.
The economy had been targeted to grow at 5.8 per cent before the outbreak of the virus.
As the pandemic raged the government launched a number of initiatives to help businesses weather the storm. The most recent, unveiled in July, aims to boost domestic consumption until January 2021 to the tune of LE125 billion by offering discounts of up to 25 per cent on durable goods and food commodities. The thinking behind the scheme is that increased spending will have a kick-on effect on production. Earlier initiatives included the Central Bank of Egypt lowering interest rates by three points, exempting late payments, non-performing loans and ATM withdrawals from fines and fees for six months, and instructing banks to provide credit to companies to finance working capital and their payment of salaries. Industry-specific support was also extended to sectors such as tourism which saw business grind to a halt because of the pandemic.
The government is also pushing ahead with major infrastructure projects. The Ministry of Housing and the New Urban Communities Authority are constructing 14 “fourth generation cities” including the New Administrative Capital, and New Alamein City.
During a follow-up visit to the New Administrative Capital on Saturday Housing Minister Assem Al-Gazzar praised the contracting companies for increasing the number of workers and equipment in a bid to finalise the mega project. The 700 square-kilometre capital, located 60km from Cairo in the area between the Cairo-Suez and Cairo-Ain Sokhna roads, was launched in 2015 by President Abdel-Fattah Al-Sisi. When complete, it will have the capacity to house more than 6.5 million people.
“Between 65 to 70 per cent of the first phase construction work has been completed,” Khaled Al-Husseini, public relations manager for the New Administrative Capital's Urban Development Company, told Al-Ahram Weekly.
The government was planning to relocate ministries and 52,300 government employees to the new capital by mid-2020 but the coronavirus pandemic forced it to reschedule the move.
In April, Al-Sisi instructed the government to reschedule the inauguration of all mega national projects planned for this year, including the New Capital and the Grand Egyptian Museum.
“The pandemic slowed work on the new capital. The curfew meant that shifts were cut back to allow workers to return home in time, and social distancing measures necessitated a reduction in the numbers of people on site. Now though,” says Al-Husseini, “we are back working at pre-crisis capacity.”
According to Al-Husseini it is expected that the majority of the first phase, including the government district, the parliament building, residential neighbourhoods, the cultural and sports zones and some universities, will be completed by mid-2021.
In a report issued last week US rating agency Moody's praised the Egyptian economy's resilience in the face of the COVID-19 pandemic and assessed the economic outlook as stable thanks to the diversification of the economy, low levels of foreign currency denominated debt and the declining costs of domestic borrowing.
Egypt's total external debt stood at $112.6 billion in the second quarter of 2019-2020,16 per cent higher than a year ago.
While debt denominated in foreign currency, which accounts for most of Egypt's foreign debt, still constitutes a heavy burden, Central Bank efforts to shore up Egypt's foreign exchange reserves means that financing needs for the next year are covered, according to a recent report issued by Capital Economics, a London-based macroeconomic research house. Reserves have resumed their upward trajectory after a hiccup in February, March and April when they fell $10 billion to $36 billion. Since May they have recorded a steady increase and now stand at $38.3billion.
Since reducing interest rates by three per cent in March, the Central Bank has kept rates stable at 9.25 per cent for deposits and 10.25 per cent for loans. While these are at least five per cent less than 18 months ago they remain among the highest, when adjusted for inflation, offered by any of the more than 50 major economies tracked by Bloomberg.
Interest rate stability has helped the pound remain steady, losing just three per cent of its value in the period between the outbreak of the virus in March till end of June, since when it has rebounded and gained two per cent.
Rating agency Fitch last week identified the pound as one of the best performing emerging market currencies and said it expects the currency to remain stable through the rest of 2020.
While the Purchasing Managers' Index, which reflects production in the non-oil private sector economy, declined slightly in August, it is now signalling growth in activity and demand for the second month in a row.
“The index has risen nearly 20 points from its nadir in April at the height of the pandemic, suggesting that the downturn has slowed markedly,” a note by IHS Markit, issuer of the index, said.
Yet the challenges ahead remain anything but easy, with water security topping the list. Moody's included it among other pressing problems, including declining industrial output and the slowdown in tourism sector, while Fitch said on Monday that Egypt's sovereign credit rating is “particularly” exposed to water stress and drought risks.
“Water risks are likely to become a more important sovereign rating driver over the medium to long term, particularly in the event of severe climate change,” said Fitch.
The possibility of a second Covid-19 wave poses another challenge. According to Ebeid, the pulmonologist, the number of infections is expected to increase slightly by the beginning of winter, and could be given a further boost as students return to school. Schools are reopening in hybrid mode, with pupils returning for refresher classes in mid-September, and the new academic year scheduled to begin on 17 October. Symptoms will be very similar to those of seasonal influenza, she said.
“No need to panic, but people must continue following precautionary measures and maintain social distancing,” she stressed.
*A version of this article appears in print in the 10 September, 2020 edition of Al-Ahram Weekly

Clic here to read the story from its source.