Egypt's GDP Growth forecast revised to 3.5% for FY23/24: World Bank

CAIRO - 10 January 2023: According to the latest Global Economic Prospects report released by the World Bank in January 2024, Egypt's GDP growth is expected to slow to 3.5 percent in Fiscal Year 2023/2024. This marks a revision from the bank's previous forecast of 4 percent for the same period. However, the report also indicates that Egypt's GDP growth is projected to rebound to 3.9 percent in Fiscal Year 2024/2025.

 

The World Bank attributes the downward revision to the ongoing conflict in the Middle East, which is anticipated to exacerbate inflationary pressures in Egypt. The report suggests that the conflict will erode households' purchasing power, constrain private sector activity, and intensify pressures on the country's external accounts, particularly in terms of tourism, remittances, and the oil trade balance.

 

In December 2023, Egypt's annual inflation rate dropped to 35.2 percent, with food and beverage prices being the primary drivers, as stated by the Central Agency for Public Mobilization and Statistics (CAPMAS) in its latest report. The World Bank's report points out that import restrictions have limited access to inputs for domestic production and exports, while the declining purchasing power of households and sluggish corporate activity have weighed on investment and private consumption.

 

This downward revision follows Egypt's own adjustment to its growth forecast for the current fiscal year, which was announced in early December. Minister of Planning and Economic Development Hala El-Said disclosed that Egypt expects a growth rate of 3.5 percent for Fiscal Year 2023/2024, down from the previous projection of 4.2 percent.