IMF trims Egypt’s growth forecast to 3% for current financial year

The International Monetary Fund (IMF) lowered its projections for Egypt’s real GDP growth for the current financial year 2023-2024 to 3 per cent, having previously forecast its economy would grow 3.6 per cent, according to its updated World Economic Outlook (WEO) report.

For emerging markets and developing economies, IMF said the growth was expected to remain at 4.1 per cent in 2024 and to rise to 4.2 per cent in 2025. An upward revision of 0.1 percentage point for 2024 since October 2023 reflects upgrades for several regions, it noted.

The IMF added that the global growth is projected at 3.1 per cent in 2024 and 3.2 per cent in 2025, with the 2024 forecast 0.2 percentage point higher than that in the October 2023 WEO “on account of greater-than-expected resilience in the United States and several large emerging market and developing economies, as well as fiscal support in China.”

The forecast for 2024–25 is, however, below the historical (2000–19) average of 3.8 per cent, with elevated central bank policy rates to fight inflation, a withdrawal of fiscal support amid high debt weighing on economic activity, and low underlying productivity growth, it stated.

“Inflation is falling faster than expected in most regions, in the midst of unwinding supply-side issues and restrictive monetary policy. Global headline inflation is expected to fall to 5.8 per cent in 2024 and to 4.4 per cent in 2025, with the 2025 forecast revised down.”