Egypt’s GDP will expand to 3.3% in FY 2015/2016 and it will grow to 3.9% in FY 2016/2017, according to a FocusEconomics Consensus Forecast report.
The FocusEconomics Consensus Forecast Middle East and North Africa report for May 2016 said Egypt’s economic growth accelerated from 3% in the third quarter (Q3) of 2015 to 4% in Q4. However, the report also said that Egypt’s overall economic situation remains far from rosy.
FocusEconomics added that inflation fell from 9.1% in February to 9% in March. The report attributed the drop to price controls, import quotas, and the effect of higher interest rates that are curbing inflation.
According to the report, inflation is expected to average 10.6% in 2016 and 10.3% in 2017.
The report noted that the government targets growth of 4.4% in FY 2015/2016 and of between 5% and 6% in FY 2016/2017.
FocusEconomics expects the economy to expand by 3.3% in FY2015/2016, which is down 1% from April’s forecast. For FY 2016/ 2017, economic growth is expected to be 3.9%.
It expects total investment to increase 6.5% in FY 2015/2016, which is down 0.1% from April’s forecast and expected to expand to 7.3% in FY 2016/2017.
“The Central Bank of Egypt (CBE) decided to keep the overnight deposit rate at 11.25% on 28 April. The move followed March’s notable hike that aimed to curb inflation expectations following the devaluation of the pound,” the report read. “FocusEconomics Consensus Forecast expects the overnight deposit rate to average 10.83% in 2016 and 10.25% for 2017.”
According to the report figures, the GDP per capita is expected to decrease to $3.448 in FY 2015/2016 compared to $3.740 in FY 2014/2015, while it is expected to reach $3.549 in FY 2016/2017.
The GDP is expected to amount to $311bn in FY 2015/2016 and to reach $327bn in FY 2016/2017. For FY 2019/2020, it is expected to be $391bn.
Unemployment is expected to be 12.7% of the active population in FY 2015/2016 and to decrease to 12.1% in FY 2016/2017.
The report expects that public debt will increase to 91% of the GDP in FY 2015/2016, compared to 88% of the GDP in FY 2014/2015. It is expected to decrease slightly down to 89.8% of GDP in FY 2016/2017.
Exports are expected to decrease to $19.8bn in FY 2015/2016, compared to $22.2bn in FY 2014/2015; however, for FY 2016/2017 the report expects exports to increase to $20.9bn.
Meanwhile, imports are expected to decrease to $54.6bn in FY 2015/2016 compared to $61.3bn in FY 2014/2015. For FY 2016/2017, imports are expected to increase to $56.4bn.
The external debt is estimated at $56.9bn in FY 2015/2016 and to rise to $63.1bn in 2016/2017.
FocusEconomics Consensus Forecast sees that the external debt will be 18.3% of GDP in FY 2015/2016 and is expected to increase to 19.3% of GDP in FY 2016/2017.