IMF: Egypt’s FDI to grow in the coming four years

By Amwal Al Ghad English On Jul 26, 2021

The International Monetary Fund's (IMF) headquarters

Egypt’s foreign direct investment (FDI) could see growing in each of the coming four years, the International Monetary Fund (IMF) said in a recent report.

The IMF forecasted Egypt’s FDI jumping as much as 60 percent to $8.6 billion in the financial year 2021-2022, up sharply from $5.4 billion last year, and to rise to $11.7 b billion in the financial year 2022-2023 before eventually recording $16.5 billion in the financial year 2024-2025.

The IMF report released following its second review of Egypt’s $5.2 billion standby facility.

Tourism revenues are also expected to see a rebound to $8 billion this financial year, up from a projected $4.4 billion in the financial year 2020-2021. These revenues will also increase to $15 billion in the financial year 2022-2023, and then $25.1 billion in the financial year 2024-2025.

“Tourism receipts are expected to remain subdued as travel restrictions in many key tourist markets remain in place,” IMF report read. The resumption of direct flights from Russia to Red Sea resorts of Hurghada and Sharm el-Sheikh next month will likely brighten the outlook. Receipts are forecasted to reach pre-pandemic levels of 4 percent of GDP in the financial year 2023-2024, IMF report added.

Exports will rise only marginally from $29.4 billion during the current financial year to $32.1 billion in the financial year 2024-2025, and will be outpaced by import growth which will grow from $65.9 billion this year to $83.8 billion by the middle of the decade.

IMF report also said Suez Canal’s revenues are expected to record $6.6 billion in the financial year 2021-2022, and to increase to $7.6 billion by the financial year 2024-2025.

For the foreign reserves, IMF said they will continue to grow over the next 12 months, to reach $44.1 billion by the end of the current financial year.

Reserves will surpass pre-pandemic levels in the financial year 2022-2023 to reach $47.6 billion, before surging to $55.1 billion by the middle of the decade, IMF noted.

For the GDP growth rates, IMF forecasts remain unchanged. It earlier forecasted that economic growth would almost double to 5.2 percent in the financial year 2021-2022 from a projected 2.8 percent in the previous financial year. It is expected to grow again to 5.6 percent in the financial year 2022-2023 before rising to 5.8 percent by the financial year 2024-2025.