The IMF also expected the country’s real GDP growth to accelerate to 5.9 percent in 2027, while placing Egypt’s real GDP growth in 2021 at 3.3 percent.

The report raised the country’s expected inflation to 13.1 percent in 2022, up from 8.7 percent it expected in April, while decreasing its projections in 2023 to 9.2 percent, down from 14 percent respectively. The fund estimated Egypt’s inflation rate in 2021 at 4.5 percent.

Responding to the repercussions of the war in Ukraine, the government lowered its projections in March for Egypt’s real GDP growth to 5.5 percent, down from 5.7 percent expected previously.

In addition, Egypt’s annual headline inflation rose to 15.3 percent in September, up from eight percent in September 2021, reaching the highest level since recording 15.7 percent in November 2018.

Egypt is currently in negotiations with the IMF to secure a fresh loan, with a deal expected to be reached before end of 2022.

Egypt has pledged to the IMF to reduce their budget deficit to six percent of GDP and to raise the initial surplus by 1.6 percent in the current FY 2022/2023, Minister of Finance Mohamed Maait said in August.

The report expected global growth to slow from 6.0 percent in 2021 to 3.2 percent in 2022 and 2.7 percent in 2023.

“This is the weakest growth profile since 2001 except for the global financial crisis and the acute phase of the COVID-19 pandemic and reflects significant slowdowns for the largest economies: a US GDP contraction in the first half of 2022, a Euro area contraction in the second half of 2022, and prolonged COVID-19 outbreaks and lockdowns in China with a growing property sector crisis,” the report explained.

The report projected global inflation to rise from 4.7 percent in 2021 to 8.8 percent in 2022, but to contract to 6.5 percent in 2023 and to 4.1 percent by 2024. 

“Upside inflation surprises have been most widespread among advanced economies, with greater variability in emerging market and developing economies," read the report.

The report also noted that the geopolitical fragmentation could impede trade and capital flows, and further hinder climate policy cooperation.

“The balance of risks is tilted firmly to the downside, with about a 25 percent chance of one-year-ahead global growth falling below 2.0 percent—in the 10th percentile of global growth outturns since 1970,” the report forecasted.