Clemens Breisinger
POLICY SEMINAR
Virtual Event - COVID-19: Emerging problems and potential country-level responses
APR 30, 2020 - 09:00 AM TO 10:15 AM EDT
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COVID-19 and the Economic Impact on Egypt
1. COVID-19 AND
THE ECONOMIC IMPACT
ON EGYPT
Clemens Breisinger
Senior Research Fellow
International Food Policy Research Institute
April 30, 2020
2. Estimating COVID-19 Impacts at Country Level
2
EXTERNAL
Impact channels
of COVID-19
Due to partial or full
lockdowns in other
countries
DOMESTIC
Impact channels of COVID-19
Due to partial or full lockdowns of
domestic economies
TOTAL
ECONOMY-
WIDE IMPACT
Output
Jobs
Households
Direct
impact
channels
Multiplier
impact
Agriculture Banking, finance &
insurance
Mining & crude oil Professional &
business services
Manufacturing Public admin & law
enforcement
Utilities Education services
Construction Health services
Wholesale & retail
trade services
Sports &
entertainment
Transportation,
storage & cargo
Other services
Hotels & food
services
Export demand
Remittances
Government revenues
3. COVID-19 Cases & Policy Timeline in Egypt
0
50
100
150
200
250
300
Confirmednewcases
First
confirmed
case in
Egypt
Schools and
places of
worships
closed, and all
flights
suspended
Curfew
7 pm to
6 am
The Government allocated EGP
100 billion (around $6.25 billion)
to combat the virus:
• a reduction in the price of natural gas
and electricity for industries;
• the immediate release of export
subsidy arrears;
• and the provision of support for the
tourism and real estate industries
through banking finance initiatives.
The Prime Minister
announced that the
budget for
healthcare for the
upcoming FY
2020/2021 will be
increased by EGP
23.4 bn.
• The government decided to increase pensions by
14% starting the upcoming FY 2020/2021
• First batch of aid to irregular workers that applied
for financial assistance worth £E500 per month.
• The government found 1.5 million workers eligible
for the aid programme, part of Cairo’s £E100bn
stimulus package during Covid-19.
Aid to farmers:
• The government fixed flour and bran prices at
EGP 3600 per ton to keep bread prices from
increasing
• The Minister of Agriculture and the Governor
of Egypt's Central Bank postponed debt
payments by farmers for 6 months.
• The Government decided to extend the
moratorium on the tax law on agricultural land
for a period of two years
Egypt
bans
export of
pulses
University hospitals and
public university dorms are
converted to quarantine
facilities
The government
added 100,000
households to the
national cash transfer
program (Takaful and
Karama)
Second
batch of aid
to irregular
workers
4. Estimated impacts in fiscal quarter 4
(April-June, 2020) lockdown
Economy:
• 17.9% loss in quarterly GDP
• Agriculture most resilient
Jobs:
• 1.1 million jobs temporarily lost
• Service jobs hit hardest
Households:
• Urban households most affected
• Income of poor HH declines by
-14-17%
Without the decisive action of the GOE these losses would likely be significantly higher.
GDP loss (in billion EGP)
-25
-20
-15
-10
-5
0
GDP losses (in %)
Household income losses (in EGP, per month).
-29.8
-
257.
5
-
837.
0
3 months
AGR IND SRV
-233.0
3 months
Temporary job losses (in 1,000)
-1,400
-1,200
-1,000
-800
-600
-400
-200
0
National Rural
poor
Rural
nonpoor
Urban
poor
Urban
nonpoor