Cairo – Mubasher: Egypt’s gross domestic product is expected to grow by 5% in fiscal year 2018 and to rise slightly to 5.8% by 2020.
Growth is projected to be achieved due to flexible private consumption and investment, in addition to a gradual improvement in exports, mainly from the tourism and gas sectors, according to a recent report by the World Bank.
The North African country’s budget deficit is likely to shrink to 9.8% of GDP in FY18, the bank forecast, adding it would be driven by an increase in interest payments, hike in global oil prices and larger-than-budgeted exchange rates.
The current account is expected to narrow down to 4.9% of GDP this year, from 6.6% of GDP in FY17, the bank highlighted.
“The high inflation accumulated over the course of FY15-FY17 has lowered the purchasing power of households across the distribution, reducing the positive spillovers of economic growth, and taking a toll on social and economic conditions,” the bank indicated.
Moreover, poverty rates in Upper Egypt governorates are three times high, as compared with Metropolitan Egypt, the bank noted.
“Recent increases in allowances of the main social programs have helped weather the effects of inflation, but imperfect coverage and targeting leave some groups unprotected,” the World Bank remarked.