Cairo – October 23, 2024: The International Monetary Fund (IMF) has raised its prediction for Egypt’s economic recovery in the coming fiscal year, now projecting the country’s GDP to rise to 4.1 percent for FY2025/2026, a significant increase compared to its FY2024/2025 forecast of 2.7 percent.
In the IMF’s latest World Economic Outlook report released on Tuesday, the fund revealed that Egypt recorded a real GDP of 3.8 percent in FY2023/2024, 1.1 percent higher than the IMF's earlier projection of 2.7 percent in July.
The IMF also highlighted concerns about the current account balance, expected to reach -6.6 percent in FY2024/2025 and -6.4 percent in FY2025/2026.
Inflation continues to pose a significant challenge, with consumer price inflation recorded at 24.4 percent in FY2023/2024, while the IMF projects a rise to 33.3 percent in FY2024/2025 before declining to 21.2 percent in FY2025/2026.
Pierre-Olivier Gourinchas, the IMF's chief economist, expressed optimism, stating, “The battle against inflation is almost won,” pointing out that inflation in many countries is nearing central bank targets.
“The decline in inflation without a global recession is a major achievement,” Gourinchas wrote in a blog post that accompanied the IMF's latest World Economic Outlook.
Regionally, the outlook remains mixed, with the Middle East and Central Asia expected to see a 0.3 percent decline in GDP share by 2024, influenced by commodity production disruptions and geopolitical tensions.
Last week, the World Bank adjusted its growth forecast for Egypt, now estimating a 2.5 percent growth rate for FY2024/2025, a decrease from a previous estimate of 4.2 percent made in June, but expects a rebound to 3.5 percent by FY2025/2026.
The IMF's Executive Board is set to review Egypt’s $8 billion loan program in November. If approved, this review will unlock $1.3 billion as the fourth tranche of the loan, which represents the largest segment acquired to date.
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