IMF slashes our growth outlook: The IMF has downgraded its fiscal year 2023-2024 growth forecast for Egypt to 3.0% from October’s projection of 3.6% in its updated World Economic Outlook (pdf). This continues a downward trend that has seen the IMF successively cutting Egypt’s FY 2023-24 outlook to 4.1% from 5.0% in July and then again to 3.6% from 4.1% a few months later.

This is in line with government expectations, whichsees the economy growing an estimated 3.0% in FY 2023-2024 according to latest forecasts.

But less optimistic than other international monitors: The World Bank and S&P both put our GDP growth at a more optimistic 3.5% for the current fiscal year.

Growth slowed more in FY 2022-2023: The Fund revised downwards its growth estimate for the last fiscal year to 3.8% from 4.2% previously. The economy grew at a 6.7% clip the year before.

The economy is expected to slightly rebound next fiscal year: The Fund now sees Egypt’s economy growing at a 4.7% clip in the FY 2024-2025, slightly below previous projections of 5.0%.

THE REGIONAL OUTLOOK-

IMF trims MENA outlook: The IMF lowered its MENA growth outlook for the year by 0.5 percentage points, now expecting regional growth to pick up to 2.9% in 2024 from 2.0% the year before. The Fund pointed to temporary oil cuts in Saudi Arabia as the main driver behind the slashed outlook.

It’s not looking good for Saudi Arabia: The Fund now sees the Kingdom’s economy to grow at a 2.7% clip for 2024, down 1.3 percentage points from October’s projections. The country’s GDP shrunk 1.1% last year in “one of its steepest contractions of the past two decades,” according to Bloomberg.

THE GLOBAL OUTLOOK-

On a global level, there’s slightly more optimism: The Fund revised upwards its 2024 global growth outlook by 0.2 percentage points to 3.1%, thanks to the strength of the US economy and certain emerging markets, alongside fiscal support in China.

What about next year? The IMF left its 2025 global growth forecast unchanged at 3.2%, well below the global growth average between 2000 and 2019 of 3.8%. The Fund sees high interest rates and fiscal support withdrawal weighing on economic growth.

Soft landing in sight? Global headline inflation is thought to fall to 5.8% in 2024 and 4.4% in 2025, as “the global economy begins the final descent toward a soft landing,” IMF chief economist Pierre-Olivier Gourinchas said in a blogpost. “On the downside, new commodity price spikes from geopolitical shocks –– including continued attacks in the Red Sea –– and supply disruptions or more persistent underlying inflation could prolong tight monetary conditions,” he cautioned.

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