IMF raises projections for Egypt’s GDP growth to 3.5%

The International Monetary Fund (IMF) has raised its projections for Egypt’s economic growth in fiscal year 2019/2020 to grow by 3.5 percent up from its 2 percent forecast , According to the October 2020 World Economic Outlook.

The IMF has left its 2021 forecast for 2.8 percent growth unchanged but sees output rising at a 5.6 percent clip by 2025.

Egypt is one of just three Middle East and Central Asia economies that won’t shrink this year.

The international finance organisation also expects local economic growth to rise in the next five years, before stabilising at around 5.6 percent in FY 2024/25.

The figures were released as part of the World Economic Outlook (WEO), released on Tuesday during the IMF and World Bank’s annual meetings.

The IMF said it expects Egypt’s average inflation rate to reach 6.2 percent in the current FY, compared to 5.7 percent for the last FY. The fund added that the country’s current account deficit will increase in FY 2020/21 to 4.2 percent of GDP, compared to estimates of about 3.2 percent in FY 2019/20.

It also expects that the unemployment rate in Egypt will register 9.7 percent during the current FY, compared to 8.3 percent in the previous FY.

Moreover, the current account deficit is expected to be 3.2 percent of GDP in the last fiscal year, down from a prior projection of 4.3 percent, with expectations to continue to drop to 2.5 percent in FY20/21 and settle at 0 percent in FY24/25.