The International Monetary Fund (IMF) forecast that Egypt’s economic growth for 2015 and 2016 will reach 4.2 and 4.3 percent, respectively.
The IMF’s projections are far lower than the 5 percent projected by the government for the fiscal year 2015/2016.
Similarly, the World Bank projected that Egypt’s economic growth would be lower than the government’s expectations. “Egypt’s economic growth could hover at about 4 percent in 2015 and 2016,” the World Bank said in a statement on Monday.
The Arab Monetary Fund’s projections are also lower than the government’s expectations. The AMF projected Egypt’s economic growth to be 3.8 percent throughout 2015 and 4.5 percent in 2016.
Egypt’s economic growth in all quarters of the previous fiscal year has yet to be released but is projected to be 4.2 percent.
An IMF delegation visited Egypt on a five-day trip last month to evaluate economic performance. In conclusion of the visit, the delegation praised the government’s economic plan.
“The authorities succeeded in significantly reducing the underlying budget deficit despite a decline in foreign grants, thanks to a wide-ranging set of reforms including energy subsidy reforms, and progress in containing the wage bill and increasing tax revenues,” the IMF staff said on Sept. 17, after the visit.
President Abdel Fattah al-Sisi’s administration reduced petroleum subsidies and introduced new taxes in July 2014, hiking fuel prices by up to 78 percent. This was part of a government plan that aims to eventually lift fuel subsidies completely in the coming few years.
Although today’s IMF report shows a decrease in commodity prices across the world, it forecast inflation in Egypt to rise to 11 percent compared to 10.1 percent last year.
Years of political turmoil have taken a toll on Egypt’s economy, halving the state’s foreign reserves and driving away tourists.
Sisi’s administration has focused on attempting to repair the economy via mega projects such as the “New Suez Canal.”
Source: Aswat Masriya
