The World Bank has raised its forecast for Egypt's GDP growth in fiscal year 2017/18 – which ends on 30 June – to 5 percent, up from the 4.5 percent it had projected in its January outlook, according to a report issued on Wednesday.

The World Bank's “Global Economic Prospects June 2018: The Turning of the Tide?” report raised the forecast for Egypt's GDP growth in fiscal year 2018/19 from January’s projection of 5.3 percent to 5.5 percent.

The forecast for FY 2019/20 remains the same, with GDP growth expected to reach 5.8 percent, according to the World Bank.

The report noted the improvement in Egypt’s investment and net exports, “supported by the stability of the exchange rate and stronger domestic demand.”

It also noted the improvement in Egypt’s international reserves, driven by capital inflows.

Egypt’s international reserves recorded $44.14 billion by the end of May.

The World Bank said inflation in the region has been “generally contained."

The report noted that inflation in Egypt “has subsided substantially in 2018, falling to 13 percent in April from a peak of more than 30 percent in July 2017, allowing the central bank to implement two interest rate cuts this year to support activity.”

On the regional level, the World Bank is expecting growth in the Middle East and North Africa to reach 2 percent in 2018, up from 1.6 percent in 2017.

The improvement is expected to be driven by “oil exporters [easing] fiscal adjustments amid firming oil prices,” the report read.

The regional outlook is expected to improve slightly in 2019 and 2020. 

“The region is also expected to benefit from a favourable global environment, post-conflict reconstruction efforts, and from oil importers’ reforms to boost domestic demand and increase foreign investment,” according to the report.  

As for the global economic growth, the World Bank expects it to remain at 3.1 percent in 2018.

Global economic growth is projected to slow gradually in the next two years “as advanced-economy growth decelerates and the recovery in major commodity-exporting emerging market and developing,” according to a World Bank press release issued on Tuesday.