Egypt’s economic growth seen at 4.2 per cent this year

CAIRO: Egypt’s economy will grow 4.2 per cent in the fiscal year that began in July, well below government projections of 5.3-5.5 per cent, economists said in a Reuters poll published on Tuesday.

The economy has struggled since the 2011 uprising against Hosni Mubarak drove tourists and foreign investors away, but sweeping reforms as part of an International Monetary Fund loan agreed last year are expected to boost growth.

The poll of 12 economists put growth at 4.2 per cent for the 201718 fiscal year and 4.5 per cent for the following year. Growth was seen rising 4.6 per cent in the 2019-20 fiscal year. “Economic growth prospects have improved as reform efforts bear fruit. The main drivers include strong growth in real exports as competitiveness improves, and continued investment in Egypt,” said Nadene Johnson, an economist at NKC African Economics.

Egypt’s planning minister said earlier this month she expected the economy to grow by up to 5.3-5.5 per cent this year. She put growth at 6 per cent for the following fiscal year. The latest Reuters consensus for urban consumer inflation was 25.4 per cent for the current fiscal year, up from a previous forecast of 23.3 per cent. Economists polled expected the rate to drop to 15.8 per cent in the 2018-19 fiscal year and 12.6 per cent the year after.

Egypt’s annual inflation rates dropped in December to their lowest levels since the country floated its pound currency in November 2016, after which prices shot up. Annual urban consumer price inflation eased to 21.9 per cent in December from 26 per cent in November and core inflation, which strips out volatile items such as food, fell to 19.86 per cent in December. -