The International Monetary Fund (IMF) has projected Egypt’s GDP growth to rebound, reaching 4.1 percent in the fiscal year 2025/2026, up from a forecasted 2.7 percent for the current fiscal year (2024/2025), according to its latest World Economic Outlook report.
The rebound marks a downward revision from the IMF’s July projection, which had predicted 4.1 percent growth for FY2024/2025, representing a 1.4 percent reduction.
On a more positive note, Egypt achieved real GDP growth of 3.8 percent in FY2023/2024, surpassing the IMF’s earlier estimate of 2.7 percent.
The IMF’s Executive Board is set to review Egypt’s USD 8 billion (EGP 390.4 billion) loan program in November, and approval of this review will release USD 1.3 billion (EGP 63.4 billion), the largest tranche of the loan.
Inflation remains a concern, with consumer prices in Egypt reaching 24.4 percent in FY2023/2024. The IMF expects inflation to rise further to 33.3 percent in FY2024/2025 before easing to 21.2 percent in FY2025/2026. Annual headline inflation edged up to 26 percent in September, though core inflation slightly declined to 25 percent.
The IMF also forecasts Egypt’s current account balance to remain negative, with projections of -6.6 percent in FY2024/2025 and -6.4 percent in FY2025/2026.
Unemployment is expected to hover around 7.2 percent in FY2024/2025 and 7.4 percent in FY2025/2026, which had only changed slightly from 7.2 percent in FY2023/2024.
In the broader region, the Middle East and Central Asia’s share of global GDP is expected to shrink by 0.3 percent in 2024, influenced by disruptions in oil production, conflicts, and extreme weather.
Globally, the IMF’s projections for FY2025/2026 show a slight decline of 0.1 percent, with growth expected to reach 3.2 percent, while forecasts for FY2024/2025 remain steady. The five-year global growth forecast stands at 3.1 percent, reflecting weaker medium-term prospects compared to pre-pandemic levels.
Commodity prices are projected to follow mixed trends. Non-fuel primary commodities are expected to rise by 2.9 percent in FY2024/2025 before declining slightly. Fuel commodity prices, including natural gas and coal, are projected to fall by an average of 3.8 percent. Food prices are expected to drop by 5.2 percent in 2024 and a further 4.5 percent in 2025, helped by record global grain production.
Global inflation is anticipated to continue its downward trend, falling from an average of 6.7 percent in 2023 to 5.8 percent in 2024 and 4.3 percent in 2025. Advanced economies are expected to experience sharper declines, with inflation stabilizing around 2 percent by 2025. In contrast, inflation in emerging markets is forecast to decrease from 8.1 percent in 2023 to 7.9 percent in 2024 and further to 5.9 percent in 2025.
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