IMF upgrades Egypt’s real GDP growth for 2022 to 5.6 percent

EGYPT – The International Monetary Fund (IMF) has upgraded Egypt’s real Gross Domestic Product (GDP) growth by 0.4 percent in 2022 to 5.6 percent, compared to the fund’s October 2021 projections.

Egypt has managed to do well amid the  Covid-19 pandemic compared to other oil-importer countries according to Petya Koeva Brooks, the IMF’s deputy director of the research department.

She has pointed out that there is stronger data coming in terms of Egypt’s economic performance that drove the revising up of its real GDP growth without giving further details.

Brooks also noted that the Omicron variant and its impact on the economy may bring uncertainty, especially for the country’s tourism sector.

It is worth noting that the World Bank also raised its projection for Egypt’s real GDP growth in 2022, according to its global economic prospects report that was issued in January.

Accordingly, the World Bank upgraded its forecasts for Egypt’s real GDP growth to 5.5% in FY 2021/2022 while maintaining the country’s outlook for FY 2022/2023 at the same rate of 5.5%.

Egypt economy is forecast to grow 5.5 percent in 2022/23

Meanwhile, Egypt’s economy is projected to grow 5.1 percent in the fiscal year that ends in June 2022 but accelerate to 5.5 percent in each of the following two years as tourism continues to rebound and the effects of the Covid-19 pandemic wane.

“We expect consumption growth to pick up from a low base post-COVID and public investment to remain strong this year,” said Allen Sandeep of Naeem Brokerage.

Tourism has been gradually recovering from COVID travel restrictions put in place in March 2020.

Tourism revenue plummeted to US$4.9 billion in 2020/21 from US$9.9 billion a year earlier.

But in the April to June quarter, it bounced back to US$1.75 billion from a low of  US$305 million in the same quarter of 2020, according to central bank data.

Economists expects annual urban consumer price inflation to climb to 6.0 percent in 2021/22, then pick up even further to 6.4 percent in 2022/23 and 7.0 percent in 2023/24, still within the central bank’s target range of 5 percent to 9 percent.

The central bank expects to leave its overnight lending rate unchanged at 9.25% throughout 2021/22 and 2022/23, then increase it to 10.25% by the end of June 2024.

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