The IMF left its growth forecast for Egypt for the current fiscal year unchanged at 3.0% in its updated World Economic Outlook (pdf) released yesterday, after having successively downgrading the country’s GDP forecast in previous reports.

This is more optimistic than the World Bank’s recent revision: The World Bank downgraded our growth outlook for the current fiscal year 0.7 percentage points to 2.8% earlier this week on the back of “sluggish industrial sector performance,” high inflation, and regional conflicts impacting Suez Canal revenues and tourism receipts.

But more pessimistic than the government outlook: The Madbouly government sees the economy growing at a 3.5% clip in the fiscal year ending June 2024.

The economy is expected to pick up in the next fiscal year, but at a slower pace than previously thought: The IMF dampened its expectations of growth for FY 2024-25 to 4.4% from its last prediction of 4.7% in January.

While over in inflation nation: Consumer prices are set to increase 32.5% y-o-y on average in the current fiscal year, an upward revision of the Fund’s previous prediction of 32.2% and up from 24.4% in the previous fiscal year.

ICYMI: Our inflation trajectory has become increasingly hard to forecast after the annual urban rate of inflation cooled 2.4 percentage points to 33.3% y-o-y in March, defying analyst forecasts that saw inflation increasing in the month. While the month before, analyst forecasts were off the mark a whole ten percentage points, but this time in the other direction, as inflation unexpectedly jumped 5.9 percentage points in February to 35.7% after having cooled for four consecutive months.

THE REGIONAL OUTLOOK-

The IMF lowered its MENA growth outlook for the year by 0.1 percentage point, now expecting regional growth to pick up to 2.8% in 2024, up from 2.0% the year before. The report pointed to the downward revision of Iran’s forecast as the main driver behind the cut on the back of projected lower non-oil activity and oil revenues in the country.

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