Growth Accounting: What Are the Sources of Growth in Egypt?

Authors

Iman  Elshair

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Growth Accounting for Egypt: What are the proximate sources of growth?

Abstract

We use Penn World Table 10.0 data, which combine new information on labour shares, physical capital, human capital and total factor productivity (TFP), to analyse the contribution of factor accumulation and TFP to Egypt’s growth from 1955 to 2019. The objective of this paper is to develop an understanding of Egypt’s growth experience, whether it was factor based or productivity based. We analyse the evolution of TFP in Egypt. Our findings show that Egypt’s growth experience has been capital based rather than productivity based. TFP has indeed deteriorated over the entire period of analysis. Despite some fluctuation, average TFP growth rate has been negative over the past 70 years at -0.1% p.a. Egypt needs to focus more on TFP growth to sustain future economic growth.

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