FocusEconomic expects higher inflation, slower growth rates

CAIRO – 7 June 2017: After the Central Bank of Egypt’s (CBE) decision in May to raise key interest rates from 14.75 percent to 16.75 percent, global provider of economic analysis FocusEconomics predicted Egypt’s inflation to average 23 percent in 2017.

Spain-based FocusEconomics said in its June Middle East and North Africa outlook that the inflation level for 2017 will be 0.6 percentage points above their projection last month, expecting it to ease to 14.1 percent in 2018.

At the end of 2017, the overnight deposit is predicted to decline to 16.13 percent in 2017, to further fall to 14.5 percent in 2018, the report said.

With regards to the investment flows, FocusEconomics said the total investment is expected to grow 6.4 percent in 2017, to ease to 5.8 percent in 2018.

Anticipating more moderate economic pace, FocusEconomic panelists expect growth rate to record 3.1 percent in 2017, down from the government’s estimate of 5.2 percent, while it forecasts 3.9 percent of growth in 2018, compared to 4.6 percent government’s projection.

The World Bank said this week that Egypt’s economy growth is predicted to record 4.3 percent, 5.0 percent and 5.3 percent in 2017, 2018 and 2019 respectively.

It further said Egypt’s GDP growth will moderate in FY2016/2017 at 3.9 percent to rebound over the medium term, registering 4.6 percent in FY2017/18 and 5.3 percent in the following fiscal year.