This marks a reduction from the IMF's July forecast, which initially estimated Egypt's real GDP growth at 4.1 percent for FY2024/2025, indicating a 1.4 percent decrease.

On a positive note, Egypt recorded a real GDP of 3.8 percent in FY2023/2024, which is 1.1 percent higher than the IMF's earlier projection of 2.7 percent in July.

The IMF's Executive Board is scheduled to discuss the fourth review of Egypt’s $8 billion loan programme in November.

Approval of this review will grant Egypt access to $1.3 billion as the fourth tranche of the loan, the largest segment acquired.

Regarding inflation, consumer price inflation in Egypt recorded 24.4 percent in FY2023/2024, with the IMF projecting it to rise to 33.3 percent in FY2024/2025. Following this peak, the IMF forecasts a decrease in inflation by 12.1 percent, bringing it to 21.2 percent in FY2025/2026.

In related news, annual headline inflation experienced a slight uptick in September, reaching 26 percent, while core inflation fell by 0.1 percent to hit 25 percent during the same month.

The IMF projects the current account balance to reach -6.6 percent in FY2024/2025 and -6.4 percent in FY2025/2026. Unemployment projections for FY2024/2025 and FY2025/2026 are set at 7.2 percent and 7.4 percent, respectively, showing no significant change from the 7.2 percent recorded in FY2023/2024.

Regional context
 

On a regional level, the share of the world GDP of the Middle East and Central Asia is expected to decline by 0.3 percent in 2024.

Disruptions in the production and shipping of commodities, particularly oil, alongside conflicts and extreme weather, have contributed to the outlook’s downward revision.

Nevertheless, the World Economic Outlook (WEO) projections have remained stable from the July 2024 WEO update and saw a decline of 0.4 percent and 0.3 percent for the projections of FY2024/2025 and FY2025/2026, respectively, of the April WEO.

Global growth
 

Globally, the WEO projections for FY2025/2026 have declined by 0.1 percent to reach 3.2 percent, while projections for FY2024/2025 remain stable.

“The five-year-ahead forecast for global growth stands at 3.1 percent, indicating continued mediocre medium-term prospects relative to pre-pandemic forecasts,” stated the report.

It also indicates that the risks for global inflation remain broadly balanced.

Commodity prices
 

The prices of non-fuel primary commodities are projected to rise by 2.9 percent in FY2024/2025 but are expected to decline by 0.2 percent thereafter.

However, fuel commodities prices are expected to decrease by an average of 3.8 percent, driven by a 16.4 percent drop in natural gas prices and an 18 percent decline in coal prices.

Meanwhile, food prices are anticipated to decrease by 5.2 percent in 2024 and a further 4.5 percent in 2025, following a projected record high in global grain production in 2024/2025.

Global inflation
 

Global headline inflation is forecasted to continue its downward trend, decreasing from an average of 6.7 percent to 5.8 percent in 2024 and further to 4.3 percent in 2025.

The disinflation trend is expected to be more pronounced in advanced economies, which are projected to decrease by two percentage points from 2023 to 2024, stabilizing around two percent in 2025.

In contrast, inflation in emerging and developing markets is anticipated to decrease from 8.1 percent in 2023 to 7.9 percent in 2024 and then further to 5.9 percent in 2025.