How can Egypt unlock its economic potential?

Egyptian policymakers’ commitment (or lack of) to economic orthodoxy continues to provide cause for concern and, while we don’t share the view that sovereign default is a serious risk, the near-term economic outlook is challenging. Over a longer horizon, though, Egypt has enormous economic potential. We expect some progress in addressing the structural issues holding back growth, allowing the economy to achieve growth rates of around 5-6% over the next two decades. However, income convergence is likely to be slower than in many Asian economies at a similar income level.

In view of the wider interest, we are also sending this Middle East Economics Focus to clients of our Long Run Economics service.