PRICES COULD RISE >18% NEXT YEAR, according to the IMF. The International Monetary Fund sees consumer prices in Egypt rising 18.2% in 2017 compared with a 10.2% hike this year — that’s the highest projected rate in the entire Middle East, North Africa, Afghanistan and Pakistan region. The IMF dropped the bombshell in its October 2016 World Economic Outlook (pdf), the standard revision of its annual forecast issued in April. The IMF document revised its 2016 forecast for rise in Egyptian consumer prices to 10.2% from April’s estimate of 9.6% — and more than doubled its outlook on 2017 to 18.2% from the April estimate of 9.5%.

There is a hint of good news: The IMF has revised Egypt’s projected growth in real GDP for 2016 to 3.8% (from 3.3% in the April 2016 WEO). However, projections for growth in 2017 were cut from 4.3% in April to 4.0% in the October report. Its projections for Egypt’s unemployment rate improved to 12.7% for this year (from 13.0% in the April estimate) and 12.3% for 2017 (from a projected 12.4% in April). The current account balance as a percentage of GDP was revised downwards to -5.8% in 2016 (from an estimated -5.3% in April), but shows a slight improvement in 2017 projections to -5.2% (as opposed to April estimates of -5.3%). On the very long run, the IMF projects (pdf) Egypt’s real GDP to continue to grow, hitting annual growth rate of 6.0% in 2021.

Meanwhile, the IMF held steady its projections for global growth, lowering them for the US in 2016 and 2017 and the UK for 2017 on the back of growing populist sentiment against trade and economic integration. Revisions to its outlook for Egypt cannot be described as simply “positive” or “negative.”

What to make of the IMF’s global forecasts? Capital Economics released a note yesterday by their Global Economist Michael Pearce, who says that while the IMF pessimistically admits that the world economy is “moving sideways,” he feels that the IMF has actually “consistently been over-optimistic in recent years” and “the IMF’s latest forecasts will be downgraded further. For a start, the Fund seems to be too upbeat on the prospects for the euro-zone… Second, the IMF is anticipating stronger growth in many emerging markets than we think is likely.” Read the full note here (pdf).