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IMF Raises Egypt's GDP Outlook, Praises Economic Reforms

IMF Raises Egypt's GDP Outlook, Praises Economic Reforms

Wednesday, 24 January, 2018 - 08:00
Pedestrians walk past the International Monetary Fund headquarters’ complex in Washington (AP Photo/Cliff Owen)

The International Monetary Fund has welcomed in its latest review the reforms that have been undertaken by Egypt but warned against a premature key interest rate cut.

The IMF had approved in November 2016 a $12-billion loan to Egypt.

It raised on Tuesday its forecast for Egypt’s GDP growth for the 2017/18 fiscal year ending in June to 4.8 percent from 4.5 percent in a report last year.

“Egypt’s economic outlook is favorable, provided prudent macroeconomic policies are maintained and the scope of growth-enhancing reforms is broadened,” the report said.

Subir Lall, IMF Mission Chief for Egypt, Middle East and Central Asia Department, said Egypt's economy grew 4.2 percent in the year to June 2017, up from 3.5 percent the previous year.

Gross domestic product was expected to expand by 4.8 percent in the current financial year and by 6.0 percent in the medium term.

Egypt's inflation rate has started to moderate thanks to tighter monetary policy since peaking in July at 35 percent, after authorities implemented the reforms, said Lall.

It is expected to fall to around 12 percent by June, and to single digits 2019, he added.

According to Lall, Egypt’s current account deficit should fall to 4.5 percent of GDP this fiscal year from about 6 percent last year.

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