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Wednesday, 23 January 2019

Egypt’s GDP will fall slightly over the next two years, UN says

Egypt’s GDP growth rate will slow slightly over the next two years, hitting 5.2% in 2019 before falling to 4.7% in 2020, the United Nations projects in its 2019 World Economic Situation and Prospects report.

Take UN estimates with a pinch of salt: The UN now estimates the Egyptian economy grew by 5.8% in 2018, beating the 3.8% figure the world body had forecast at the beginning of last year.

The IMF, by contrast, sees Egyptian GDP growth accelerating through 2020: Its Data Mapper tool shows the fund predicts growth in Egypt will accelerate from 5.3% in 2018 to 5.5% this year, 5.9% in 2020 and then 6.0% in 2021 and 2022.

Easing inflation: Consumer price inflation will continue its downward trajectory over the next couple of years, the UN report says. The headline rate — which currently sits at 12% — is expected to average 10.7% over the next 12 months before falling to 8.9% through 2020. The UN figures that will prompt the central bank to keep its monetary policy unchanged through much of 2019.

Fiscal reform: The report highlights fiscal consolidation as the major bogeyman of North African economic policymakers. Despite fiscal deficits narrowing slightly, the report notes that the Egyptian government must do more to increase its revenue to avoid damaging the country’s growth prospects.

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