EBRD raises Egypt’s growth forecast to 4.8% for FY2023/24

The European Bank for Reconstruction and Development (EBRD) raised its growth forecast for Egypt’s economy this financial year to 4.8 percent, from 4.1 percent for previous year.

Growth is estimated to have slowed to 4.1 per cent in the fiscal year ending June 2023 (FY 2022-23) and is projected to pick up to 4.8 per cent in FY 2023-2024.” EBRD said in its latest Regional Economic Prospects report released on Wednesday.

“Despite a recovery in revenues from the Suez Canal and tourism, growth was weighed down by a deceleration in construction and manufacturing activities and a contraction in gas production.

“Natural gas output is estimated to have declined by 9.3 percent year on year in the first half of 2023, reaching a three-year low. Meanwhile, unemployment dropped slightly to 7.0 percent in the second quarter of 2023, with higher rates among women (19.2 percent) and in urban areas (10.3 percent).”

The forecast is still above Egyptian government’s growth target for the current and upcoming financial years. The government has set a target for economic growth of 4.4 percent for the current financial year, from a previous expectation of 4.1 percent, Hossam Heiba, chairman of the General Authority for Investment (GAFI), said last week.

SEMED Countries

The EBRD forecasted modest economic growth in 2023 in the southern and eastern Mediterranean (SEMED) region. Gross domestic product (GDP) in the SEMED region is expected to grow by an average of 3.7 percent in 2023 and 3.9 percent in 2024, slightly below previous forecasts. The forecast reflects delays to structural reforms and increased fiscal and external vulnerabilities.