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.. |P a g e ( ) 8 issue 11- September 2019 ELITE

Does our GDP grow?

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Mohamed Fawzi, Third Level, Economics

Introduction:
We have all witnessed the appraisals of the international organizations, media press, credit rating
institutions, and financial institutions on the efforts of the Egyptian government in achieving a competitive real
Gross Domestic Product (GDP). According to The Economist, our GDP has risen to reach 5.6% leading us to
rank third after China and India. However, some people continue to criticize the achieved GDP and assume that
it‟s not sustainable. Several rumors state that our GDP has risen due to our dependence on infrastructure
projects and real estate expansions that provide temporary job opportunities. Thus it was important to outline
the growth rates of the sectors that actually contributed to economic growth.

Contribution per sector to GDP:

As per the statistics published by the ministry of planning, monitoring, and administrative reform
(MPMAR); 5 sectors in 2019 contributed with a percentage of 64% in the GDP‟s growth rate. As we can see
the extractions sector ranks first with a percentage of 30%, followed by Wholesale & retail trade sector ranking
second with a percentage of 9.6%, followed by construction & building sector with a percentage of 9.5%,
whereas the Real estate activities occupy the fourth rank with a percentage of 8.5% and the telecommunication
sector occupy the fifth rank with a percentage contribution of 6.7%. This means that the real estate activities
contribute to less than 10% of the GDP and by this the claimthat the job opportunities provided are not
sustainable is mistaken. Besides, in reference to infrastructure and construction mega-projects employment
opportunities, I believe that we still have more than 10 years at least of vacancies in these project since these
massive projects will not stop at the current time. We still have many projects to be implemented from road
networks, underground railway networks, monorail projects, and several other things which we need to work on
in terms of infrastructure. All of these require a time frame of several years, and thus we can‟t refer to their job
opportunities as temporary.

Projections of GDP growth rate of Egypt compared to world:
GDP Growth Rate Projections)%(
This figure illustrates the projections of real GDP growth rate of Egypt
Egypt Global economy compared to the rest of the world. As we can see the world real GDP
European Union Emerging markets growth rate is expected to be 3.6% and fixed at this percentage for the
Asia MENA region upcoming three years and is having a value less than 3.5% according to
1.3 3.2 2.8 2.8 other sources such as the IMF. This implies that the global economy is
6.3 heading to a slowdown and this might be dangerous for small and
6.3 6.3 6.2
developing countries. Yet, we come to notice that the real GDP is
4.4 4.8 4.9 4.8 expected to rise in Egypt by approximately 0.5% every year to reach a
1.6 1.7 1.7 1.6 peak of 7% in 2022. This means that Egypt will start to compete with
3.3 3.6 3.6 3.6 the Asian economy by 2021 and even achieve a higher GDP than the
5.6 6 6.5 7 average of the Asian countries. This is a very good indicator and it
proves that the structural reform program of Egypt is on the correct
path. This is why we always hear international news appraisals of our
2019 2020 2021 2022 economic success.
Source : Egypt's Ministry of Planning

.. |P a g e ( 8 ) issue 11- September 2019 ELITE