IMF raises Egypt’s Economic Growth Outlook to 4% in 2015

Egypt’s economy is projected to improve by 4.0 percent in 2015, according to the semi-annual World Economic Outlook released Tuesday by the International Monetary Fund (IMF).

“Egypt’s economy, which grew by 2.2 percent last year, is now forecast to improve by 4.0 percent in 2015. That is up from October’s projection of 3.5 percent.”

On the other hand, the IMF cut its forecast for other regional growth this year amid lower oil prices and faltering trade flows.

The fund expects the Middle East, North Africa, Afghanistan and Pakistan to grow by 2.9 percent this year, down from its earlier prediction of 3.3 percent.

“Oil price declines will sharply slow growth for oil exporters, especially those that also face difficult initial conditions,” said Olivier Blanchard, chief economist at the IMF.

“There has been a transfer of income from oil-exporting countries to oil importers. For the oil exporters it is clearly not very good news.”

The IMF expects growth in the UAE of 3.5 percent this year. That is down 1 percentage point from its prediction last October.

“The fall in oil prices has cast a cloud over the Gulf economies,” said Jason Tuvey, emerging markets economist at Capital Economics.

“This has been reflected in lower growth forecasts, where growth will be much lower than it has been for the last decade or so.”

Still, the IMF expressed cautious optimism over growth prospects for North Africa.

“It has been a difficult few years with a transition to new political regimes and a European economy that was decelerating,” said Thomas Helbling, a researcher at the IMF.

“Countries like Tunisia have made significant progress on reforms, and looking forward, the fact that Europe is recovering should help,” he said.

The IMF left its headline forecast of global growth unaltered at 3.5 per cent.