The World Bank has downgraded its Egypt growth outlook for the coming fiscal year due to the country’s ongoing economic problems, according to figures in its Global Economic Prospects report (pdf). The lender now expects the economy to grow at a 4.0% clip in FY 2023-2024, down 0.8 percentage points from its last forecast in January, before accelerating to 4.7% the year after. This is roughly in line with the government’s expectation for 4.1% growth for the coming fiscal year.

This would mean flat growth: The Bank forecast in April that growth will slip to 4.0% this year from 6.6% in FY 2021-2022 as rising inflation, higher interest rates, the FX crunch and import disruptions weigh on the economy.

BUT- We’re still expected to be one of the top performers in the region: The only countries with stronger projected growth rates are Iraq (6.0%) and Djibouti (4.4%). Egypt is forecast to outperform all regional oil exporters, as weakening global oil demand hits GDP growth. The average growth rate amongst regional oil exporters stands at 2.0% for FY 2023-2024.

A GLOBAL DOWNGRADE-

Expect a sharp slowdown in the global economy this year: The lender now expects global growth to fall to 2.1% in 2023 from 3.1% last year as higher global interest rates and the fallout from the war in Ukraine squeeze economic activity.“[Expect] last year’s sharp and synchronized slowdown to continue this year into a sharp slowdown,” Indermit Gill, the bank’s chief economist, told reporters yesterday, according to the Associated Press.

On the bright side: The latest figure is a 0.4 percentage-point upgrade from the Bank’s previous forecast in January, which pinned global growth at just 1.7%.

Times are hard for emerging markets: Growth in emerging markets excluding China will “slow markedly” to 2.9% this year from 4.1% in 2022 due to tightening financial conditions, high inflation and slowing external demand. The Bank expects the first half of the 2020s to be one of the weakest half-decades in the past three decades for emerging- and developing economies.

Looking ahead: The World Bank expects the global economy to make a “tepid” recovery in 2024, with growth rising to 2.4%.

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