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Wednesday, 19 April 2017

IMF sees Egypt’s real GDP growth reaching 3.5% in 2017

The International Monetary Fund is projecting Egypt’s real GDP growth will reach 3.5% in 2017, and rise to 4.5% in 2018 according to the first chapter (pdf) of the World Economic Outlook April 2017 report which is out now. It attributes this rise to Egypt’s comprehensive reforms. Bloomberg’s Tarek El Tablawy is noting that this represents a drop from its previous growth projection in 2017 of 4.0%, adding that the drop signals the toll the float of the EGP has had on the economy. The report also expects consumer price inflation to average 22% this year, and subsequently fall to 16.9% next year. Unemployment is also expected to drop next year to 11.8% from 12.6% in 2017. As we noted yesterday, the World Bank’s Egypt Economic Outlook April 2017 report puts growth this year at 3.9% rising to 4.6% in 2018, and sees consumer inflation averaging 20.1% in 2017 and dropping to 14.2% in 2018.

The World Economic Outlook anticipates global economic activity will pick up this year and the next, with growth for 2017 projected to jump to 3.5% in 2017, up from 3.1% in 2016 on the back of a long-awaited cyclical recovery in investment, manufacturing, and trade. Global growth is projected to marginally rise to 3.6% in 2018. However, the report sees that binding structural impediments such as low productivity growth and high income inequality will continue to hold back a stronger recovery, and the balance of risks remains tilted to the downside, especially over the medium term. These impediments are basically pushing advanced economies to adopt protectionist policies, warns the report. Chapters two and three of the report covers emerging markets and the downward trend in labor income shares.

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