Analysts expect Egypt's economic growth to slow in fiscal year after IMF loan deal
Date
7/23/2024 8:02:29 AM
(MENAFN) A recent Reuters poll of analysts indicates that Egypt's Economy is expected to grow at a slightly slower pace this fiscal year than previously forecasted, following an USD8 billion loan deal signed with the International Monetary Fund (IMF) in March. The median forecast from the poll, which included 17 analysts, predicts a 4 percent growth in gross domestic product (GDP) for the fiscal year starting July 1. This projection is a downgrade from the 4.35 percent forecasted in April and the 4.15 percent forecasted in January for the same period.
The poll also revealed that Egypt's economy grew by 2.9 percent in the fiscal year that ended on June 30, which was lower than the 3 percent forecast in April and the 3.5 percent forecast in January. However, analysts are optimistic about a rebound, projecting a growth rate of 4.99 percent for the fiscal year 2025-26. James Swanston of Capital Economics noted that the anticipated slower growth this fiscal year is due to tighter fiscal and monetary policies and the depreciation of the Egyptian pound following the IMF agreement. Despite these challenges, he highlighted potential for stronger GDP growth in the fiscal year 2025-26.
The economic impact of the war in Gaza has further compounded Egypt's challenges, causing significant revenue declines from the Suez Canal and a slowdown in the tourism sector, both critical sources of foreign exchange for the country. These factors have exacerbated the economic strain, leading to a more cautious outlook. On June 2, the then-planning minister had predicted that economic growth would rise to 4.2 percent in the fiscal year 2024-25, reflecting a more optimistic stance prior to the latest developments.
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