Egypt’s Growth Forecast Raised

The International Monetary Fund has adjusted its projection for Egypt’s growth in fiscal 2017-18 ending in June to 4.8% instead of the previously projected 4.5%, to reach 6% in the medium term. With regard to inflation, the IMF projects that it will decline to 12% in June 2018 and reach single digits by 2020, IMF report said.
The report highlights Egypt’s economic outlook as favorable, though various risks may yet constrain growth, including corruption, increases in oil prices, or any reversals or slowdowns of reforms, Ahlul Bayt News Agency reported.
The IMF believes that Egypt’s economic outlook remains favorable, provided prudent macroeconomic policies are maintained, and the scope of growth-enhancing reforms is broadened.
The report pinpoints some factors that could curb Egypt’s current account deficit to around 4.5% of GDP in 2017-18, and to about 3.5% by 2021-22, such as improved external competitiveness, reforms of the business environment and tourism recovery.
Moreover, the IMF forecasts primary fiscal surplus to register at 0.2% of GDP in 2017-2018, as a result of the impact of the value added tax increase, lower wages, and fuel subsidies cuts. In light of this, the report indicates that the government target to improve the primary balance by a cumulative 5.5% of GDP is attainable, and general government debt is projected to decline by about 17% of GDP by the end of the program.