World Bank slightly downgrades Egypt’s growth forecast for 2024

Ahram Online , Tuesday 9 Jan 2024

The World Bank downgraded its forecasts for Egypt’s real GDP growth for 2024 to 3.5 percent from 3.7 percent in a previous estimate, according to the Global Economic Prospects report released on Tuesday.

Overview of Cairo. Reuters.
Overview of Cairo. Reuters.


The bank also downgraded the country’s real GDP growth rate for 2023 to 3.8 percent from 4.2 percent as per the report.

“Import restrictions constrained access to inputs for domestic production and exports while declining purchasing power of households and sluggish corporate activity weighed on investment and private consumption,” the WB’s report said.

“The conflict in the Middle East will likely exacerbate the inflation problem [in Egypt], eroding households’ purchasing power and constraining activity in the private sector, and intensify pressures on external accounts through implications on tourism, remittances, and oil trade balance,” the report warned.

In November, Egypt’s annual headline inflation decelerated to 36.4 percent, down from 38.5 percent in October, according to CAPMAS.

On Sunday, Fitch Solutions released a report projecting Egypt’s real GDP growth at 4.1 percent in 2024.

The Egyptian government has revised its forecasts for the country’s real GDP growth during the current fiscal year, which ends in June. The latest revision announced in December puts the figure at 3.5 percent, compared to the 4.2 percent projected a month earlier.

Expectations for MENA & global economy

The World Bank revised its real GDP growth projections for the Middle East and North Africa (MENA) region for 2024 and 2025 to 3.5 percent for both years, down from previous projections of 3.3 percent and 3 percent, respectively.

“The ongoing conflict in the Middle East has heightened uncertainty and geopolitical risks in the MENA region. Assuming the conflict does not escalate, growth in the region is forecast to reach 3.5 percent in 2024 and 2025—which is stronger than previously envisioned—as oil-exporting economies benefit from the unwinding of oil production cuts,” the bank’s report said.

The report maintained its estimate for the global economy’s real GDP growth in 2024 at 2.4 percent. However, it downgraded its forecast for 2025 to 2.7 percent, a decrease from the earlier estimate of 3.1 percent.   


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