As coronavirus cases began to multiply in Egypt in May, disruptions in industry and tourism have left a trail of loss of tasks that now threaten more than a decade of falling unemployment in the Arab world’s most populous nation.
While Egypt was ready to reopen after 3 months of partial economic closure, public statistics firm CAPMAS provided a labour market review with a review of the effect of COVID-19.
According to the report, more than a quarter of the contracted Egyptians lost their jobs between February and May, even as they tried to continue the pandemic. He didn’t say how many people were surveyed.
In March, Egypt suspected flights abroad, banned mass gatherings and imposed a 19-hour permit. at 6 a.m., curfew while others are asked to reduce travel between provinces. After gradually reducing hours, the government lifted the curfew at the end of June and allowed cafes and restaurants to run under limited capacity, businesses will have to stay shorter hours. Airports and many primary tourist sites, adding the pyramids, have reopened.
The number of new viral infections reported has decreased in recent days. And the easing of restrictions is already making a difference for the non-oil sector, with trade situations recovering in June to a maximum of four months. But the challenge now is to translate the progressive perspective into earnings for the labor market.
Last month, Egyptian corporations reduced employment to the fastest speed in just 4 years, according to IHS Markit. The unemployment rate reached 9.7% in April, according to the Ministry of Planning, up from 7.9% at the end of last year.
“The government is seeking a balance between physical fitness and the economy,” Prime Minister Mostafa Madbouly said at a televised press convention calling for a stay at the top.
In the past, the government cut its economic expansion forecast for the fiscal year that began in July, but the intensity of the slowdown depends on when contagion declines. According to the CAPMAS report, about 90% of Egyptian families have switched to less expensive foods to adapt to new circumstances.
Planning Minister Hala El-Saeed said in a statement that unemployment has affected service sector staff, which account for more than 17% of the total.
The government paid a monthly payment of 500 pounds ($31) to tourism and casual staff between April and June. The North African nation, where about a third of the population lives below the poverty line, has allocated more than $6 billion to fight the virus.
However, almost a portion of Egyptian families have had to borrow cash to offset the decline in their profits. According to the CAPMAS study, about 70% of families have noticed that their incomes have declined since the onset of coronavirus.
In order for a recovery in the labour market to recover, Egypt would like an improvement in tourism, one of the largest employers. According to the United Nations Conference on Trade and Development, Egypt is one of the few countries where the tourism cave can charge 3% or more of gross domestic product this year.
Despite the loss of tasks, IHS Markit believes that a change is not far away. A measure of situations in the non-oil personal sector recovered in June thanks to a slowdown in declining rates of new business and activity, according to a report released Monday.
“Employment figures dropped at an accelerated rate in June, there are several symptoms that this will soon change,” IHS Markit economist David Owen said in the report. “Increased demand in some businesses, higher arrears and a maximum of six months means that corporations deserve to resume hiring in the near future.”
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