Egypt¡¯s economic activity is gaining momentum. Growth accelerated to 5.6% during the first half of FY15, compared to a dismal 1.2% in the same period last year. The recent spike in economic activity reflects favorable base effects, but more importantly broad based sector recovery, especially in tourism and manufacturing. On the demand side, growth continues to benefit from resilient consumption and government stimulus, supported by large financial inflows from Gulf States.
Annual growth is expected to double to 4.3% in FY15, and should increase further thereafter, compared to the muted growth of 2% during FY11-FY14. In tandem, unemployment reversed course and started to slowly inch downwards, averaging 13% in the first half of FY15 (still 4 percentage points higher than FY10). The latest available official poverty headcount indicated that more than 26% of Egypt¡¯s population lived below the poverty line in FY13.