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Thursday, 12 May 2016

EBRD cuts growth forecasts for SEMED region, expects pickup in 2017

The European Bank for Reconstruction and Development (EBRD) has cut its growth forecasts for the Southern and Eastern Mediterranean (SEMED) region to 2.9% in 2016, compared to 4.1% in the November forecast, due to political tensions and a slowdown in global trade, according to the EBRD’s May 2016 Regional Economic Prospects report (pdf). However, a recovery to around 4% is expected in 2017. Growth in Egypt slowed to 3% in the first quarter of FY2015-16 driven by a sharp contraction of exports of over 25% due to “a fall in tourism receipts; declining Suez Canal earnings reflecting a slowdown in global trade; and weak competitiveness.” The bank expects to hold growth at 3.3% for FY2015/16 as a whole, but a rebound to growth of 4.2% is expected in FY2016/17, helped by improved competitiveness.

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