Fitch Solutions ups Egypt’s GDP growth projections to 6.62% for 2022

Fitch Solutions has raised its projections for Egypt’s real GDP growth to 6.62 percent for 2022, up from 6.59 percent it expected a month ago. This is the fifth month in a row Fitch Solutions updates its projections for Egypt.

According to its monthly MENA Economic Outlook Report, Fitch lowered its expectations for the country’s inflation rate by 0.2 percent to 13 percent through the end of 2022, down from 13.2 percent, for the first time in four months.

Egypt’s annual headline inflation hiked from 15 percent in September to 16.2 percent in October to surpass the previous high point of 15.7 percent mark set in November 2018, the country’s official statistics agency CAPMAS announced earlier this month.

On the exchange rate level, Fitch projected the Egyptian pound to continue to weaken against the U.S. dollar in coming weeks.

In October, the country’s central bank decided to durably flexible exchange rate regime, leaving the forces of supply and demand to determine the value of the Egyptian pound. The decision came in the awake of the two percent (200 bps) interest rates hike it applied to contain the inflationary pressure caused by elevated global inflation and the repercussions of the war in Ukraine.

To date, the central bank hiked the key interest rates by a total of five percent (500 bps) in 2022 since the outbreak of the Russian war in Ukraine.