The Information and Decision Support Center at the Council of Ministers has begun implementing the integrated research project to formulate scenarios and policy alternatives necessary for the Egyptian economy to deal with the global economic situation during the years 2023 and 2024, within the framework of implementing the assignments of Dr. Mostafa Madbouly, Prime Minister, in this regard.
Participating in the first session were Dr. Zeljko Pogeti, Chief Economist at the World Bank in Cairo, Dr. Omnia Helmy, Professor of Economics at the Faculty of Economics and Political Science at Cairo University, Dr. Yumman Al Hamaki, Professor of Economics at Ain Shams University, and Dr. Najwa Samak, Professor of Economics at the Faculty of Economics and Political Science at Cairo University. Cairo, and Dr. Alia Aref, Professor of Administration at the Faculty of Economics and Political Science, Cairo University.
Mr. Osama El-Gohary, Assistant Prime Minister and Head of the Information and Decision Support Center, explained that the research project includes 18 workshops dealing with a number of priority topics for the Egyptian economy and decision-makers in Egypt, aimed at benefiting from the opinions and recommendations of more than 350 local and international experts. This project also aims to identify practical measures that would contribute to reducing potential economic risks and transforming the crises in the global economy into opportunities for the Egyptian economy to benefit from in order to enhance its resilience, through the use of the opinions of a large number of eminent economic experts. Supports the decision-making process in Egypt during the years 2023 and 2024.
El-Gohary pointed out that this project comes within the framework of the Egyptian state’s interest in formulating appropriate policies to enhance the resilience of the Egyptian economy in the face of the risks that the global economy is going through, which witnessed a clear growth in recent years in light of the successive and intertwined crises, starting with the Covid-19 pandemic and what resulted. Crises in global supply chains, up to the Russian-Ukrainian crisis and the resulting serious threats to global food and energy security.
In this context, the first workshop in the context of implementing this project dealt with prospects for economic growth in light of global economic challenges and risks, and was attended by a number of experts.
At the beginning of the first session, a presentation was made by the Information and Decision Support Center, in which it shed light on the potential economic conditions and risks during the years 2023 and 2024, based on the expectations and estimates of international institutions, including the expectation of a sharp and widespread decline in global economic growth during the year 2023. The expected growth rates range between 1.7% and 2.9%, which represents the sharpest slowdown in the global economy since the seventies of the last century, while the pace of economic growth is expected to rise to between 2.7% and 3.1% during the year 2024 in parallel with the expected improvement in the levels of economic activity. in a number of developed and developing countries.
It is also expected that there will be a relative decline in the global inflation rate to 6.6% in 2023, compared to about 8.8% in 2022, due to the unprecedented global tightening of monetary policy to reduce inflationary pressures across the world. Despite this, inflation rates in 80% of the countries of the world will remain higher than Their pre-pandemic levels, before inflation rates fell to 4.3% next year, following the gradual waning of the impact of monetary policy tightening.
On the other hand, it is expected that global interest rates will continue to rise and reach their peak in mid-2023 in light of the continued efforts of global central banks aimed at containing inflationary pressures, and then the negative repercussions of raising interest rates in major economies and their effects on the exit of capital from developing countries and market economies. Emerging, debt and currency crises expected in a number of those countries.
The participating experts presented many recommendations to support the resilience and resilience of the Egyptian economy in the face of potential global economic conditions and risks. Whereas, Dr. Zeljko Bogetti, chief economist at the World Bank in Cairo, pointed out that despite the similarity of the economic situation in Egypt and South Korea in the seventies of the last century in terms of income levels in both countries, the economic situation in the two countries differed completely over the decades following that period. Until the average per capita GDP in South Korea reaches nine times that of Egypt in 2022, the main reason for the difference between the two countries is due to the rapid population increase in Egypt.
Buggetti also indicated that the disparity in export performance between the two countries was also among the reasons for the difference in levels of economic development. South Korea followed a high degree of openness and export orientation, while the Egyptian economy’s export performance was below ambitions and capabilities.
Zelikow confirmed his optimistic view of the Egyptian economy. Given that Egypt is a large country with an ancient civilization, and it possesses competitive advantages that other countries lack, such as the distinguished geographical location in the heart of the Arab world, which helps it increase its capabilities to reap the fruits of foreign trade, transfer technology and knowledge, and that Egypt is an attractive environment for tourism and foreign investments, Which continues to make it one of the most attractive business environments in the Middle East in the coming years.
While Dr. Nagwa Samak indicated the need to work on developing an operational conceptual framework that enhances the resilience of the Egyptian economy in facing crises with the aim of formulating the necessary policies to confront potential crises and determining which of them will have a greater impact on the Egyptian economy, and how and methods to deal with those crises, stressing the need for this to include The framework includes a number of policies that will support the resilience of the Egyptian economy in facing crises, whether before or after their occurrence