Egypt growth seen below government forecasts

Egypt’s economy will grow 4.4% in the fiscal year that began in July, well below government projections of 5.0%-5.25%, a Reuters poll showed on Tuesday.
The figure is also below the 4.5% prediction from the International Monetary Fund which agreed a $12bn deal with Egypt in November last year in a bid to help the north African country revive its economy.
Egypt’s economic growth has slowed since the 2011 uprising scared off tourists and foreign investors.
But since the IMF agreement, Cairo has implemented reforms, including tax hikes and subsidy cuts, hoping to put the country on the right track.
“Our forecast for GDP growth…reflects robust growth in exports, stronger industrial production, rising natural gas production and recovering tourism, though high costs remain a challenge for the private sector,” said Maya Senussi, a senior economist at Oxford Economics.
While the consensus in the poll of 10 economists put growth at 4.1% for the fiscal year that ended in June, it was expected to show an improvement in the current and rise further to 4.6% in the 2018-19 fiscal year. But that would be well below the 7% annual growth in the years before 2011.
The latest Reuters consensus for core inflation was 15% for the current fiscal year, down from a previous forecast of 17.2% and was expected to drop to 10% in the 2018-19 fiscal year.
IMF mission chief for Egypt, Middle East and Central Asia Subir Lall said in an online briefing in September that inflation was expected to fall to “slightly above” 10% by the end of the fiscal year.
Inflation has gradually climbed since the central bank floated the currency in November as part of the IMF deal, reaching a record high in July of 35.26%, driven by energy price hikes.