Egypt’s GDP to Increase 5.3 Percent in 2022, and 5.2 Percent in 2023

Egypt's GDP is Expected to Increase 5.3 Percent in 2022, and 5.2 Percent in 2023

According to a Reuters poll released on Thursday, Egypt’s economy would grow at 5.3 percent in the fiscal year ending in June, but will slow to 5.2 percent in 2022/23 and 5.0 percent in 2023/24 as tourism declines and commodity prices and interest rates increase.

The planning ministry predicted 5.6 percent growth this fiscal year in November, while the finance ministry indicated in January that its drought budget for the fiscal year 2022/23 aimed for 5.7 percent growth.

However, due to the impact of the Russia-Ukraine war, the planning ministry decreased its real GDP growth projection for 2022/23 to 5.5 percent last month.

Egypt, which is one of the world’s top wheat importers, gets the majority of its wheat from Russia and Ukraine, which also provide a big proportion of its visitors.

Meanwhile, investors have pulled billions of dollars out of Egypt’s treasury market as a result of the Russian invasion.

“High food and gasoline prices for an extended period of time may limit consumer spending. The loss of significant tourists from Europe and Russia might stifle economic progress. Increasing interest rates might stifle investment “Institute of International Finance’s Garbis Iradian remarked (IIF).

The COVID-19 epidemic wreaked havoc on tourism, with income falling to $4.9 billion in 2020/21 from $9.9 billion the previous year. In July-December 2021, it increased to $5.8 billion.

Economists predicted annual urban consumer price inflation of 8.2 percent in 2021/22, 9.8 percent in 2022/23, and 7.6 percent in 2023/24 in the most recent Reuters poll.

Egypt’s inflation rose to 10.5 percent in March, the highest level in almost three years, thanks in part to supply shortages after the Ukraine crisis, according to figures from the official statistics office CAPMAS. Inflation is expected to range between 5% and 9%, according to the central bank’s goal range.

“We expect the surge in commodity prices to be transitory, with a rebound in FY24,” said BNP Paribas’ Pascal Devaux.

According to a survey of 19 experts conducted April 11-20, Egypt’s currency would stay reasonably stable at 18.35 pounds per dollar through the end of 2022. The central bank allowed the currency to drop to roughly 18.45 per dollar on March 21, down from a previous high of 15.70.

According to economists, the pound would decline to 18.89 by the end of 2023 and 18.95 by the end of 2024.

According to the survey, the central bank is anticipated to boost its overnight lending rate to 10.75 percent in June from 10.25 percent today, then to 11.25 percent by the end of June 2023 before decreasing it to 10.75 percent by the end of June 2024.

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