World Bank forecasts 5.3% growth for Egypt in FY2018/19

The World Bank Group said Monday it forecast Egypt’s economy to grow by 4.6 percent in the 2017-18 financial year and 5.3 percent in the 2018-19 financial year.

“GDP is expected to grow by 3.9 percent in FY17, and will be largely driven by public investment and to some extent net exports.” World Bank stated.

The World Bank also expected private investment to pick up only in the second half of 2016-17 financial year, supported by “enhanced competitiveness following the depreciation of the currency and the gradual implementation of business climate reforms.”

Tourism is also expected to steadily recover on the back of a weaker currency, the World Bank added. “Yet, growth will likely be undermined by slower growth of private consumption, which is expected to be negatively affected by record high inflation rates. Prudent monetary policy is projected to bring inflation down over the forecast horizon after the one-off effects of depreciation, subsidy reforms, and the introduction of VAT (value-added tax) dissipate.”

According to the World Bank, the fiscal deficit is projected to narrow to 10.5 percent in FY17, contingent on the government’s commitment and ability to sustain its fiscal consolidation plan.