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Wednesday, 15 March 2023

Growth slows in 2Q 2022-2023

Egypt’s economy grew 3.9% y-o-y in 2Q FY 2022-2023, according to preliminary data from the Planning Ministry. Growth in the three months from October-December 2022 remained strong despite ongoing global economic challenges and geopolitical uncertainty, Planning Minister Hala El Said said yesterday in a meeting with Prime Minister Moustafa Madbouly. The economy expanded at a 8.3% clip in the same period last year.

The economy grew an estimated 4.2% in 1H FY 2022-2023. GDP growth in the second quarter slowed from a 4.4% y-o-y pace in the first quarter of the current fiscal year.

A downwards revision for the full-year forecast: The Planning Ministry is now expecting growth to come in at a 4.2% clip in the current fiscal year, down from a November estimate of 5.0%. That tallies with the Finance Ministry’s most recent estimate of 4.0-5.0%. The IMF, the European Bank for Reconstruction and Development, a recent Reuters poll, the World Bank, and Fitch ratings are all predicting growth in the range of 4.0-4.8% this fiscal year.

REMEMBER- FinMin is expecting headwinds to take a toll on the budget. The Finance Ministry in March said it expects to miss earlier targets to reduce the budget deficit and debt-to-GDP ratio during the current fiscal year as the impact of the EGP devaluation and rising borrowing costs squeeze public finances.

Hold for the details of next year’s budget: FinMin will send the draft budget for FY 2023-2024 to the House of Representatives for discussion during the week of 26 March.

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