CAIRO: The International Monetary Fund has increased its forecast for Egypt’s economic growth in 2015 to 4 percent, from 3.8 percent in its previous assessment, it said in its World Economic Outlook (WEO) released late Tuesday.
The fund forecasts Egypt’s economy to grow by 4.3 percent in 2016, noting that lower oil prices will reduce Egypt’s vulnerabilities as a main oil importer in the Middle East.
“Egypt’s macroeconomic stabilization plans and wide-ranging structural reforms are expected to increase confidence, and growth is expected to rise to 4 percent this year,” the organization said in the report.
It added that maintaining macroeconomic stability, generating sustainable growth and jobs require continued fiscal consolidation, steady implementation of reforms, and external financing.
Egypt’s credit upgrade among other things have given signs of “nascent improvement in confidence,” said the IMF, referring to Moody’s Investors Service’s decision to upgrade Egypt’s issuer and senior unsecured bond ratings to B3 from Caa1, with a stable outlook last week.
This upgrade was the first positive step from the most reserved rating agency since the January 25 Revolution in 2011. was the first positive step from the most reserved rating agency since the January 25 Revolution in 2011, yet it remains “very low,” Amr Hassanein, the Chairman of Middle East Rating and Investors Services (MERIS), told The Cairo Post.
Moody’s attributed the upgrade to three key drivers topped by the “improvement of macroeconomic performance, reduction in external vulnerabilities, and government’s ongoing commitment to fiscal and economic reform.”