CAIRO: The International Monetary Fund has raised its forecast for Egypt’s economic growth in 2015 from 4 percent to 4.2 percent, the second upgrade in 2015, according to a Tuesday report.
It its World Economic Outlook (WEO) released Tuesday, the fund maintained its forecast for Egypt’s economy in 2016 at 4.3 percent.
Egypt’s outlook upgrade follows a positive report issued by the IMF mission visit to Cairo in September to review recent economic developments since the Article IV Consultation mission in November 2014.
The IMF mission praised Egypt’s macroeconomic stabilization plans and wide-ranging structural reforms implemented so far.
“There have been positive economic developments since the mission’s last visit in Egypt. Some of the pledges made at the Egypt Economic Development Conference in March are already in the implementation phase,” said IMF’s mission head Chris Jarvis at the conclusion of their visit.
Jarvis added that the opening of the parallel Suez Canal after just one year of work, along with and a major gas find in Egyptian waters in the Mediterranean Sea bode well for Egypt’s outlook in the medium-term.
Jarvis stated that the Egyptian authorities succeeded in slashing the budget deficit despite a decline in foreign grants, citing a wide-ranging reforms including energy subsidy reforms, and progress in containing the wage bill and increasing tax revenues.
Meanwhile, the report shows that Egypt’s inflation rate is projected to surge to 11 percent in 2015, compared to 10.1 percent last year. However, this rate is expected to reverse, and slip toward 8.8 percent in 2016.
Unemployment in the Egypt, a country of 90 million citizens is projected in the recent IMF report to slide from 13.4 percent in 2014 to 12.9 percent in 2015. A further slip toward 12.4 percent is forecasted in the next year as well.