Forecasts for Egypt’s GDP growth rise to 4.2% in 2023, decrease to 3.6% in 2024: IMF

Doaa A.Moneim , Tuesday 10 Oct 2023

The International Monetary Fund (IMF) has raised its projections for Egypt’s real GDP growth in 2023 to 4.2 percent, up from the 3.7 percent it expected in July, according to the World Economic Outlook (WEO) report issued by the fund on Tuesday.



Yet, the IMF lowered its forecast for the country’s real GDP growth to 3.6 percent in 2024, down from the 4.1 percent it forecasted in July, the report showed.

The IMF released its flagship report on the sidelines of the annual meetings, held in collaboration with the World Bank Group, which kicked off on Monday in Marrakech.

Compared to July forecasts, the IMF’s expectations for Egypt’s inflation in 2023 decreased to 23.5 percent down from 24.4 percent, while increasing to 32.2 percent up from 32 percent in 2024.

If the forecasts are correct, Egypt’s inflation would rank third among oil-importing countries in 2023 following Sudan and Pakistan, but the second in 2024 following Sudan, according to the report.

Egypt has currently entered a four-year Extended Fund Facility (EFF) programme, approved by the fund in December 2022, which allows Egypt to secure a total loan of $3 billion.

A high-level Egyptian delegation is participating in the meetings to push forward the completion of the much-delayed progress of the programme’s first and second reviews.

On the regional level, the report lowered its projection for the Middle East and North Africa (MENA) in 2023 to two percent, down from the 2.5 percent it expected in July, before bouncing back to 3.4 percent in 2024.

On the global front, the report forecast global GDP growth to slow from 3.5 percent in 2022 to three percent in 2023 and 2.9 percent in 2024.

This projection is still below the historical average of 3.8 percent, as per the July edition of the report

For advanced economies, the report said that the expected slowdown is from 2.6 percent in 2022 to 1.5 percent in 2023 and 1.4 percent in 2024, amid stronger-than-expected US momentum but weaker-than-expected growth in the Euro area.

For emerging market and developing economies, the report projected growth for such economies to modestly decline from 4.1 percent in 2022 to four percent in 2023 and 2024, respectively, with a downward revision of 0.1 percent in 2024.

The report indicated that these forecasts reflect China’s property sector crisis.

Forecasts for global growth over the medium term, at 3.1 percent, are at their lowest in decades, with weak prospects for countries to catch up to higher living standards, the report added.

In terms of global inflation, the report forecast a steady decline from 8.7 percent in 2022 to 6.9 percent in 2023 and 5.8 percent in 2024.

The report noted that forecasts for 2023 and 2024 are revised up by 0.1 percent and 0.6 percent, respectively, and inflation is not expected to return to target until 2025.

“The global economy continues to recover from the pandemic, Russia’s invasion of Ukraine, and the cost-of-living crisis. In retrospect, resilience has been remarkable,” said Pierre-Olivier Gourinchas, the IMF economic counsellor and the director of the research department.

“Despite war-disrupted energy and food markets and unprecedented monetary tightening to combat decades-high inflation, economic activity has slowed but not stalled. Even so, growth remains slow and uneven, with widening divergences,” he added.

WEO report noted that central banks across the world need to restore price stability, while using policy tools to relieve potential financial stress when needed.

The report also stressed that effective monetary policy frameworks and communication are vital for anchoring expectations and minimizing the output costs of disinflation.

Cooperation is needed to alleviate climate change impacts and accelerate green transition, by ensuring steady cross-border laws of the necessary minerals, according to the report.

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