Egypt’s economy expands healthily in annual term: FocusEconomics

Egypt’s economy expands healthily in annual term: FocusEconomics

Furthermore, it projected inflation to stand at 8.9% in CY2022 — which is up by 1.7 percentage points from last month’s forecast — and 7.7% in CY2023.

“Dynamics likely slowed in 3Q and at the outset of 4Q, as soaring prices for energy and grain resulting from the Russian-Ukrainian war and higher global interest rates hammer output. On 11 March, Egypt — the world’s largest wheat importer — banned exports of related commodities for three months to protect reserves,” the report read.

“Moreover, authorities approved a bundle of measures to partly alleviate the strain, including the allocation of $2.3bn for local wheat purchases and the increase of pensions, public salaries, and tax exemptions. Meanwhile, Egypt is seeking a new IMF programme that could help mitigate the economic fallout from the war. Additionally, from 1 May the Suez Canal — the government’s main source of foreign reserves — will see temporarily increased taxes on oil, petroleum products, and liquified gas tankers.”

“GDP growth should accelerate in the current FY, before slowing slightly in FY2022/23 — which starts in July 2022. The war will likely impact the all-important tourism sector, while the additional fiscal measures should see a widening of the deficit in coming months.