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Egyptian government speaks of a coming global crisis

The Egyptian government has announced a serious crisis that will affect world trade, which will lead to its significant decline.

Egyptian Planning Minister Hala Al-Said said at today’s cabinet meeting chaired by Mostafa Madbouli that the Egyptian economy continues to achieve strong growth during the first quarter of the 2022/2023 fiscal year at a rate of 4.4. %, despite the challenges caused by three global events: the consequences of the coronavirus and the Russian-Ukrainian crisis, as well as the adverse effects of climate change.

The minister added that, according to preliminary data, the Egyptian economy is expected to grow by about 5% by the end of the current financial year 2022/2023, despite the current effects of the Russian-Ukrainian crisis, the effects of which are likely to spread over the next year.

The seven sectors that contributed the most to GDP in the first quarter of the current financial year were presented, namely: agriculture, wholesale and retail trade, restaurants and hotels, construction, real estate and business services, social services, communications and information.

And the minister continued: The activity of the Suez Canal has increased as a result of the marketing policy pursued by the authorities to attract new shipping lines, and also as a reflection of some global changes that have led to an increase in the savings achieved by the Suez Canal compared to alternative routes, in light of high prices for vessel charter. , freight forwarders, rising oil prices and changing maps of world trade.

With regard to the unemployment rate, she explained that it rose slightly to 7.4% in the first quarter of the current fiscal year compared to 7.2% in the corresponding quarter of the previous year, and the inflation rate shows an increase driven by global inflationary upward trends.

During the meeting, a number of necessary measures were presented to achieve a balance between high growth rates and containment of higher inflation rates while maintaining employment levels, as well as reducing the burden of external debt.

Dr. Hala Al-Saeed then moved on to the main objectives of the macroeconomic policy of the Egyptian economy, noting that these objectives are presented in the control of the balance between indicators: economic growth, inflation and unemployment.

In her speech, the Minister of Planning referred to the explanation of the consequences of the Russian-Ukrainian crisis for the Egyptian economy, explaining that this war led to the disruption of international supply chains, which led to an increase in world food and energy prices, and thus the escalation of global inflation and its implications for the Egyptian economy.

Dr. Hala Al-Saeed pointed out in this regard that the crisis caused global interest rates to rise, followed by financial market turmoil and higher financing costs, which in turn led to higher price levels in various countries around the world. world, and all this led to a marked slowdown in economic growth amid signs of a global recession.

She added that global economic growth has slowed from 6% in 2021 to 3.2% this year, with growth expected to slow further to 2.7% next year. With a large decline in the case of developed economies.

The planning minister attributed the slowdown in global economic growth to growing concerns about the inability of monetary policy to contain inflation, the prevalence of the debt crisis in emerging markets and the expected decline in production in Europe, caused by a shortage of Russian gas supplies, in addition to the worsening real estate crisis in China.

The minister added that global trade activity is expected to decline in the next two years, as global trade growth has seen a sharp decline to 4.3% this year, and a further slowdown to 2.5% is expected in 2023; The consequences of the Russian-Ukrainian crisis have taken their toll.

In this context, she added, global trade performance has declined as a result of high interest rates, continued disruptions in supply chains, and high transport and logistics costs.

Source: RT


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