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IMF, World Bank slash Egypt’s growth outlook: The International Monetary Fund and the World Bank have slashed our growth forecast for the current fiscal year and the upcoming fiscal year in their respective World Economic Outlook (pdf) and Global Economic Prospects report (pdf).
For the current fiscal year: The IMF now sees the economy growing at a 3.6% clip during the current fiscal year, down 0.5 percentage points from previous forecasts. The World Bank is a tad less optimistic, having slashed this fiscal year’s growth forecast by 0.7 percentage points to 3.5%.
The Madbouly government is more optimistic: The Planning Ministry projects GDP growthof 4.0% for FY 2024-2025, supported by private sector reforms and gradual economic recovery.
As for FY 2025-26: The IMF slashed next fiscal year’s growth forecast by 1.0 percentage point and now expects the economy to grow 4.1% in line with the revised World Bank projection of 4.2%, down 0.4% from last summer’s projections.
The rationale: “In Egypt, growth is projected to strengthen to 3.5% in FY2024-25 and 4.2% in the following fiscal year, supported by private consumption growth amid gradually abating inflation, robust inflows of remittances, and improved sentiment. Investment in Egypt, particularly in infrastructure development, will be shored up by financing from the United Arab Emirates,” the World Bank said in its report.
The regional outlook: The World Bank expects growth in the MENA region to reach 3.4% in 2025 and 4.1% in 2026 up from 1.8% last year — the 2025 forecast is down 0.8 percentage points from previous forecasts, the lender attributed the downward revision to OPEC+ members extending voluntary oil production cuts. Meanwhile, the IMF sees the Middle East and Central Asia growing at a 3.6% clip in 2025 and 3.9% in 2026 — both forecasts were slashed 0.3 percentage points from the forecasts made last October.
Both institutions flagged heightened uncertainty in their regional outlooks due to ongoing conflicts in the Middle East, with the World Bank warning that the conflict “could push up global energy prices and inflation, and dampen activity, especially in regions more dependent on imported energy.”
