Egypt’s consumer prices index (CPI) is projected to fall to 7% in fiscal year (FY) 2022/23, which is the same CPI average of the years from 2000 to 2009, according to the International Monetary Fund’s (IMF) World Economic Outlook (WEO) report, which was released on Tuesday.
The CPI average is forecasted to record 14% during the current FY 2018/19 compared to 20.9% in FY 2017/18, the report cited, noting that the gross domestic product (GDP) is expected to hike to 6% in FY 2022/23, from 5.5% in the current FY 2018/19 and 5.3% in FY 2017/18.
According to the report, the GDP’s recovery reflects improvements in tourism, rising natural gas production, and increased confidence in the economy, due to the implementation of the economic reform programme, supported by the IMF’s Extended Fund Facility.
Moreover, Egypt’s healthy foreign reserves and flexible exchange rate, leave the economy well-positioned to manage any acceleration in outflows, and maintain sound macroeconomic frameworks ,as well as a consistent policy implementation, all of which has led to a successful macroeconomic stabilisation, mentioned the report.
The current account deficit is expected to reach 1.2% of GDP in FY 2022/23 from 2.4% of GDP in FY 2018/19 and 2.6% in FY 2017/18, said the report.
Furthermore, global growth for 2018 and 2019 is estimated to remain steady at its 2017 level, but its pace is less vigorous than projected in April, and it has become less balanced, said the report., “Downside risks to global growth have risen in the past six months, and the potential for upside surprises has receded,” the report added.
Global growth is projected at 3.7% for 2018 and 2019, which is 0.2% point lower for both years than the previous forecast in April, noted the report, mentioning that the downward revision reflects surprises that suppressed activity in early 2018 in some major advanced economies, in addition to the negative effects of the trade measures implemented or approved between April and mid-September, as well as a weaker outlook for some key emerging markets, and developing economies, arising from country-specific factors, tightering financial conditions, geopolitical tensions, and higher oil import bills.
Since January, a sequence of US tariff actions on solar panels, washing machines, steel, aluminium, and a range of Chinese products, plus retaliation by trading partners, has complicated global trade relations, the report explained.