World Bank Lowers Egypt's 2024 Growth Forecast To 2.4%

(MENAFN- Daily News Egypt) The World Bank has revised down its forecast for Egypt's economic growth in 2024, projecting real GDP expansion of just 2.4%, compared to 3.8% in 2023. A moderate recovery is expected in the years ahead, with growth forecast to rise to 3.5% in 2025 and 4.2% in 2026, according to the latest Global Economic Prospects report.

These projections represent downward revisions of 0.4, 0.7, and 0.4 percentage points respectively from the estimates published in June 2024, reflecting a more challenging economic outlook than previously anticipated.

While Egypt remains on a path of gradual recovery, its pace lags behind that of several regional counterparts. For example, Saudi Arabia's economy is expected to grow by 3.4% in 2025, up from an estimated 1.1% in 2024. Similarly, the broader Middle East and North Africa (MENA) region is projected to expand by 3.4% in 2025, compared to 1.8% in 2024. Egypt's slower momentum contrasts with these more robust regional trajectories, the report noted.

The World Bank attributed the downward revisions to persistent macroeconomic pressures. These may include continued currency depreciation, high inflation, and delays or difficulties in implementing structural economic reforms. Nonetheless, the report suggests that stabilisation efforts and increased investment could underpin the projected acceleration in growth by 2025 and 2026.

On the global level, economic growth is forecast to slow to 2.3% in 2025-almost half a percentage point below projections made earlier this year. While a global recession is not anticipated, the report warns that if current forecasts hold, the average annual global growth rate for the first seven years of the 2020s will be the slowest for any decade since the 1960s.

Moreover, growth is expected to decelerate in nearly 60% of developing economies this year. These countries are forecast to grow by an average of 3.8% in 2025, rising only slightly to 3.9% in 2026 and 2027-more than a full percentage point below the average seen in the 2010s.

For low-income countries, the growth outlook has also dimmed, with projections for 2025 downgraded by 0.4 percentage points to 5.3%. Rising tariffs and tight labour markets continue to put upward pressure on global inflation, which is expected to average 2.9% in 2025-still above pre-pandemic norms.

However, the World Bank report notes that global growth could recover more quickly if major economies manage to reduce trade tensions. It estimates that resolving ongoing disputes and halving tariff levels from their late-May 2025 levels could boost global growth by 0.2 percentage points on average in both 2025 and 2026.

To accelerate growth, the Bank recommends that countries focus on improving the business climate and fostering productive employment by enhancing workforce skills and enabling more efficient matching between workers and firms. It also emphasised the importance of international cooperation, including multilateral support, concessional financing, and targeted emergency aid for conflict-affected nations.

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