Egypt to rank 7th largest economy by 2030: Standard Chartered

Source: Xinhua| 2019-01-10 21:31:09|Editor: xuxin
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CAIRO, Jan. 10 (Xinhua) -- Egypt to rank the seventh largest economy in the world by 2030, and will precede Russia, Japan and Germany, state-run Ahram newspapers reported on Thursday.

"Egypt will likely be an emerging market as it will come in the seventh place out of ten by 2030," Ahram quoted a report of Standard Chartered Bank, a British multinational banking and financial services company headquartered in London, as saying.

The volume of Egypt's economy will hit 8.2 trillion U.S. dollars by 2030, the report added.

The prediction for the world's gross domestic product (GDP) rankings comes in new long-term forecast by Standard Chartered which includes a projection for China to become the largest economy by 2020 based on the purchase power parity exchange rates and nominal GDP.

The report added that India will likely be larger than the U.S. in the same period while Indonesia will rank into the top five countries.

"Our long-term growth forecasts are underpinned by one key principle which is the countries' share of world GDP converged with their share of the world's populations, driven by the convergence of per-capita GDP between advanced and emerging economies," Standard Chartered economists David Mann wrote in a note.

Meanwhile, the World Bank expected rise of the growth rates in the Middle East and North Africa region by 1.9 percent, noting that Egypt will be the most important country in the region that will see growth of 5.6 percent in 2019.

The World Bank attributed its predictions to the ongoing economic reform, the increase of investments and the private consumption rates.

In late 2016, the Egyptian government started to liberalize the exchange rate of its local currency, the Egyptian pound, to contain shortage of the U.S. dollars as an initial step of an economic reform program based on strict austerity measures, tax hikes and subsidy cuts.

Egypt's reform plan is encouraged by the International Monetary Fund (IMF), which offered the Arab country a 12-billion-dollar loan to support the reform, two-thirds of which have already been delivered.

Egypt expects a tranche of 2 billion dollars from the IMF loan within weeks.

The IMF annual report expected Egypt's economic growth up to 5.2 percent in the 2017-18 fiscal year compared to 4.2 percent in the previous fiscal year, but Egypt achieved a bit higher growth of 5.3 percent.

The IMF report also expected Egypt's growth to further accelerate to reach 5.5 percent in the ongoing 2018-19 fiscal year.

Egypt's fiscal year starts in July and ends of June.

The reports stressed "optimistic outlook" because Egypt growth rate reached 5.4 percent due to the economic reforms that haven't seen any social turbulence, an economic expert Moatasem al-Shahidy said.

He added Egypt is very close to its final station in the IMF loan trip, noting that Egypt has achieved initial surplus in the balance which was an important step to shrink the balance deficit.

The report of Standard Chartered predicting Egypt's ranking in the seventh place was based on several factors: population number, state's policy of increasing expenditure on the sectors of health and education which raise the citizen competency, and the gross national product rate, he said.

Egypt has overcome the crisis of the emerging markets as it started its economic reform early, the expert noted.