CAIRO: Egypt’s economy is expected to grow by 2.3 percent and 4.1 percent in 2014 and 2015, respectively, according to the World Economic Outlook by the International Monetary Fund released Tuesday.
“Economic growth in Egypt is expected to be broadly the same in 2013, as political uncertainty will continue to weigh on tourism and foreign direct investment, notwithstanding the fiscal stimulus supported by GCC financing,” IMF stated in the report.
Egypt’s economy grew by 2.1 percent in 2013.
The organization further noted that “large imbalances will persist unless structural reforms and fiscal consolidation are initiated.” The report also expected economic growth to reach 4 percent in 2019.
Egypt and the IMF have had tense relationship because of the international lender’s efforts to persuade Cairo to undertake economic reforms such as subsidy cuts and impose a value added tax.
After Hosni Mubarak’s exit in 2011, successive governments borrowed from banks operating in Egypt to cover the budget deficit which is expected to range between 11 to 12 percent, or 200 billion EGP ($28.7 billion,) by the end of the current fiscal year 2013-2014, according to Minister of Finance Hany Kadry.
For over two years, Cairo has sought an IMF loan worth $4.8 billion, and the two sides went on sporadic negotiations, but no final agreement has been reached.
Egypt’s budget deficit is currently funded by CBE treasury bills and bonds, one of the governmental instruments for debts, as well as aid from Gulf States and international loans.