OECD ECONOMIC SURVEY OF EGYPT Overcoming economic challenges and improving long term prospects @OECD @OECDeconomy Paris, France 23 February 2024 oe.cd/egypt-eco
The Egyptian economy has proved resilient in the face of the COVID-19 shock but growth has slowed
Note: The “neighbouring countries” refer to a set of countries located in the same region: Algeria, Israel, Jordan, Lebanon, Morocco, Tunisia, and Türkiye.
Source: OECD, National Accounts database.
Real GDP Annual changes, % -4 -2 0 2 4 6 8 10 12 -4 -2 0 2 4 6 8 10 12 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Egypt Neighbouring countries
Inflation has slowed but remains high and broad-based
Note: The Fiscal Year (FY) 2018/19 is the base year for consumer price weights.
Source: Central Agency for Public Mobilization and Statistics; Central Bank of Egypt.
0 20 40 60 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Headline Core Inflation 12-month rate, in %
Foreign exchange reserves are low
0 10 20 30 40 50 0 10 20 30 40 50 Total reserve assets In % of GDP, end-2022
Note: Total reserve assets include the reserve position in the IMF. Source: Ministry of Planning and Economic Development; Central Bank of Egypt.
Growth will pick up
Note: Data refer to the fiscal years from July to June of the following year.
Source: OECD Economic Outlook November 2023.
Real GDP growth, % FY 2022/23 FY 2023/24 FY 2024/25 Consumer price index, % 4.4 3.2 3.8 15.9 32.0 25.1 Central government gross debt, % of GDP 86.9 92.0 95.7
FY 2025/26 5.1 7.5 80.7
Source: Central Bank of Egypt; and central banks of the referenced countries. Policy interest rate 0 5 10 15 20 25 30 35 40 45 50 0 5 10 15 20 25 30 35 40 45 50 2016 2017 2018 2019 2020 2021 2022 2023 2024 Egypt Morocco Türkiye Jordan
Monetary policy needs to remain restrictive until inflation approaches the target
Interest payments are set to rise due to weak investor confidence
Budget balance and interest payments
Note: OECD projections for fiscal year 2023/24.
Source: Ministry of Finance, Monthly Finance Report, December 2023 and Budget Fiscal Year 2023/24; Ministry of Planning and Economic Development.
Source: IMF, World Economic Outlook – October 2023 database. General government gross debt % of GDP, 2022 or latest value 0 50 100 150 200 0 50 100 150 200 283
A credible consolidation strategy is needed to reduce public debt
Reviving private sector growth
Faster labour productivity growth is needed to ensure income convergence
Note: The “neighbouring countries” refer to a set of countries located in the same region: Algeria, Israel, Jordan, Lebanon, Morocco, Tunisia, and Türkiye.
Source: IMF, World Economic Outlook – October 2023 database.
GDP per worker In thousands, 2015 USD PPPs 0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100 2001 2005 2009 2013 2017 2021 Egypt Neighbouring countries OECD
Business dynamism should be revived
New firm entries
Note: Firms here refer to limited liability companies. Data for Egypt cover 2015-22, data for Indonesia cover 2015-16. Averages chosen to smooth the impact of the pandemic in 2020 on business dynamism.
Source: General Authority of Investment and Free Zones; and World Bank, Entrepreneurship database.
0 2 4 6 8 10 12 14 16 18 0 2 4 6 8 10 12 14 16 18
India Egypt Jordan Greece Turkiye Viet Nam Bulgaria Morocco Brazil Costa Rica OECD avg China Chile OECD top 5
Per 1000 population aged 15-64, average of 2015-2020
Removing regulatory barriers would improve the business environment
Note: The “comparator countries” refer to 17 countries for which the OECD has already produced at least one OECD Economic Sur vey and whose living standards are closest to Egypt’s, namely: Brazil, Bulgaria, Chile, China, Colombia, Costa Rica, Greece, India, Indonesia, Malaysia, Mexico, Morocco, South Africa, Thailand, Tunisia, Türkiye, and Viet Nam. Source: World Economic Forum (2019), Global Competitiveness Index 4.0.
Regulatory framework for entrepreneurship 0 (not burdensome at all) to 100 (extremely burdensome), 2019 0 20 40 60 80 100 0 20 40 60 80 100 Administrative requirements Cost of starting a business Conflict of interest regulation Egypt Comparator countries OECD
Note: Only a few OECD member countries report output with a breakdown of the non-financial corporate sector (S11) in a comparable way to that of Egypt: Costa Rica, Czechia, Mexico, Slovenia, South Korea and the United Kingdom. Data refer to fiscal year 2021/22 for Egypt, 2017 for Korea, 2020 for Costa Rica, Czechia, and United Kingdom, and 2021 for Mexico and Slovenia.
Source: Ministry of Planning and Development; OECD, National Accounts database and OECD calculations.
Reducing the weight of state-owned enterprises in the economy would spur private sector activity
Public non-financial corporate sector As a share of total output in %, 2021 or latest 0 5 10 15 20 25 0 5 10 15 20 25 United
Kingdom Czechia Korea Costa Rica Slovenia Mexico Egypt
Lowering import tariffs would facilitate integration into global value chains
Note: Weighted mean applied tariff is the average of effectively applied rates weighted by the product import shares corresponding to each partner country. When the effectively applied rate is unavailable, the most favoured nation rate is used instead. Data refer to 2019 except for Thailand (2015), Tunisia (2016), Israel (2017), Mexico (2018), Jordan and Malaysia (2020).
Source: World Bank, World Development indicators.
Weighted mean applied tariffs % 0 2 4 6 8 10 12 0 2 4 6 8 10 12
Competitive and transparent procurement procedures would support the fight against corruption
Note: “Control of Corruption” is one of the World Bank’s Worldwide Governance Indicators. It captures perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as "capture" of the state by elites and private interests.
Source: World Bank, Worldwide Governance Indicators.
Control of corruption Index scale: -2.5 (worst) to 2.5 (best), 2022 -1,5 -1,0 -0,5 0,0 0,5 1,0 1,5 -1,5 -1,0 -0,5 0,0 0,5 1,0 1,5
Promoting better-quality job creation
Foster
the growing and increasingly
educated population
0 10 20 30 40 50 60 70 80 0 10 20 30 40 50 60 70 80 2000 2005 2010 2015 2020 No certificate Primary and lower secondary Higher secondary and post-secondary University or above Working age population by education attainment Million
high-quality job creation for
better
Source: United Nations, Department of Economic and Social Affairs, Population Division; OECD calculation based on Assaad (2020).
Reforms should aim at lifting employment rates, especially for youth and women
Note: ILO standards, LFS based, including informal employment.
Source: World Bank, World Development Indicators.
Employment rates across countries in %, 2022 0 20 40 60 80 0 20 40 60 80 Total working age population (15+) Female (15+) Youth (15-24)
Measures to reconcile work and family responsibilities would boost female employment
Note: ILO standards, LFS based, including informal employment.
Source: World Bank, World Development Indicators.
Female labour force participation rate In %, 2022 0 20 40 60 80 0 20 40 60 80
Further reducing the social security contribution rate would facilitate formal job creation
Note: 2023 data for Egypt, 2019 data for Algeria, Brazil, Colombia, Costa Rica, Morocco, South Africa and Tunisia; 2018 data for Bulgaria, China, Greece, India, Indonesia, Jordan, Lebanon, Malaysia, Thailand, Türkiye and Vietnam.
Source: International Social Security Association.
Social security contribution rate As a share of before-tax wages in %, 2022 0 5 10 15 20 25 30 35 40 45 0 5 10 15 20 25 30 35 40 45 Social security contribution rate Egypt total: before the 2019 reform
Cash transfers to the poor should be expanded while keeping them targeted
Note: For Egypt, the benefits shown include the Takaful and Karama programmes.
Source: World Bank (2022) “Egypt Public Expenditure Review for Human Development”.
Cash transfers to the poor As a share of GDP in %, 2022 0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5
Education spending should be prioritised
Note: Data refer to 2020, except for Brazil, Chile (2019), Mexico (2018) and Tunisia (2016).
Source: World Bank, World Development Indicators.
Total government expenditure on education As a share of GDP in %, 2020 or latest 0 1 2 3 4 5 6 7 8 0 1 2 3 4 5 6 7 8
Accelerating the green transition
Prioritise climate efforts where emission targets can be reached more easily
Note: Emissions include carbon dioxide (CO2) emissions from fossil fuels and industry; land use change is not included. The “neighbouring countries” refer to a set of countries located in the same region: Algeria, Israel, Jordan, Lebanon, Morocco, Tunisia, and Türkiye.
Source: Ritchie, Roser and Rosado (2020), “CO₂ and Greenhouse Gas Emissions”.
Per cent change in the total volume of emissions since 2000 -40 -20 0 20 40 60 80 100 -40 -20 0 20 40 60 80 100 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Egypt Neighbouring countries OECD
Stronger private sector engagement is needed to finance investment in emission reductions
Note: The “neighbouring countries” refer to a set of countries located in the same region: Algeria, Israel, Jordan, Lebanon, Morocco, Tunisia, and Türkiye.
Source: OECD, World Energy Balances database.
Renewable energy As a share of total energy supply in % 0 2 4 6 8 10 12 14 0 2 4 6 8 10 12 14 2000 2003 2006 2009 2012 2015 2018 2021 Egypt Neighbouring countries OECD
Better management of existing resources would help address rising water scarcity
Note: Water stress is defined as freshwater withdrawal as a proportion of available freshwater resources (adjusted for the amount of water required to sustain aquatic ecosystems, with a minimum risk of degradation). The “neighbouring countries” refer to a set of countries located in the same region: Algeria, Israel, Jordan, Lebanon, Morocco, Tunisia, and Türkiye.
Source: FAO,
Water stress 0 20 40 60 80 100 120 140 160 0 20 40 60 80 100 120 140 160 Egypt Neighbouring countries OECD 2020 2000 Freshwater withdrawal as a proportion of available freshwater resources, %
Aquastat.
For more information
Disclaimers:
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.
27
OECD OECDEconomy oe.cd/egypt
