IMF Expects Egypt Economy to Grow 5.9% in Year to End of June

The reflection of Egyptians walking is seen in a shop window at the Khan al-Khalili market in Cairo on May 20, 2016. (AFP)
The reflection of Egyptians walking is seen in a shop window at the Khan al-Khalili market in Cairo on May 20, 2016. (AFP)
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IMF Expects Egypt Economy to Grow 5.9% in Year to End of June

The reflection of Egyptians walking is seen in a shop window at the Khan al-Khalili market in Cairo on May 20, 2016. (AFP)
The reflection of Egyptians walking is seen in a shop window at the Khan al-Khalili market in Cairo on May 20, 2016. (AFP)

Egypt’s economy is expected to grow 5.9% in the year ending in June, the International Monetary Fund said on Tuesday — unchanged from its April forecast but below the government’s target of 6% to 7%.

Analysts have hailed Egypt for tough economic reforms tied to a three-year, $12 billion loan program with the IMF agreed in late 2016, which has been disbursed in full.

The reforms included devaluing the currency by about half, cutting energy subsidies and introducing a value-added tax. Those changes have left many of Egypt’s nearly 100 million citizens struggling to make ends meet.

In its World Economic Outlook, the Fund brought down its 2019/2020 forecast for consumer price inflation to 10% from 12.3% six months ago.

Egypt said its economy grew by 5.6% in the 2018/19 year, slightly above the IMF’s estimate of 5.5%, unchanged from April.

The World Bank forecast on Thursday that Egypt’s economy would grow by 5.8% this fiscal year and estimated it grew 5.6% in 2018/2019, matching the government’s figure.

The IMF forecast Egypt’s current account deficit would widen to 2.8% of GDP this fiscal year from its 1.7% estimate in April. It also widened its estimate for last year’s current account deficit to 3.1% from 2.4%.

The IMF improved its expectations for unemployment in Egypt, predicting it would fall to 7.9% this fiscal year, down from its estimate of 8.3% six months ago. It also estimated unemployment in 2018/19 at 8.6%, below its April expectation of 9.6%.

“A loss of reform momentum would reduce growth and potential output and put pressure on unemployment, given the fast-increasing labor force,” the IMF said in its final review of Egypt’s reform program, written in July and released this month.

The IMF said last year that Egypt will have a working age population of 80 million by 2028.



Report: US Ready to Reopen Oil Stockpile if Petrol Prices Surge Again

FILE PHOTO: A view of the Phillips 66 Company's Los Angeles Refinery (foreground), which processes domestic & imported crude oil into gasoline, aviation and diesel fuels, and storage tanks for refined petroleum products at the Kinder Morgan Carson Terminal (background), at sunset in Carson, California, US, March 11, 2022. REUTERS/Bing Guan/File Photo
FILE PHOTO: A view of the Phillips 66 Company's Los Angeles Refinery (foreground), which processes domestic & imported crude oil into gasoline, aviation and diesel fuels, and storage tanks for refined petroleum products at the Kinder Morgan Carson Terminal (background), at sunset in Carson, California, US, March 11, 2022. REUTERS/Bing Guan/File Photo
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Report: US Ready to Reopen Oil Stockpile if Petrol Prices Surge Again

FILE PHOTO: A view of the Phillips 66 Company's Los Angeles Refinery (foreground), which processes domestic & imported crude oil into gasoline, aviation and diesel fuels, and storage tanks for refined petroleum products at the Kinder Morgan Carson Terminal (background), at sunset in Carson, California, US, March 11, 2022. REUTERS/Bing Guan/File Photo
FILE PHOTO: A view of the Phillips 66 Company's Los Angeles Refinery (foreground), which processes domestic & imported crude oil into gasoline, aviation and diesel fuels, and storage tanks for refined petroleum products at the Kinder Morgan Carson Terminal (background), at sunset in Carson, California, US, March 11, 2022. REUTERS/Bing Guan/File Photo

The Biden administration is ready to release more oil from the US strategic stockpile to stop any jump in petrol prices this summer, the Financial Times reported on Monday.

Senior Biden adviser Amos Hochstein told the newspaper that oil prices are "still too high for many Americans” and he would like to see them “cut down a little bit further.”

Hochstein, speaking to the FT said that the US would "continue to purchase into next year, until we think that the Strategic Petroleum Reserve (SPR) has the volume that it needs again to serve its original purpose of energy security."

The Energy Department this year has been buying about 3 million barrels of oil per month for the SPR after selling 180 million barrels in 2022 following Russia's invasion of Ukraine. The move was an effort to curb gasoline prices that spiked to more than $5.00 a gallon, but it also reduced the reserve to its lowest level in 40 years.

Earlier this month, Energy Secretary Jennifer Granholm told Reuters that the US could hasten the rate of replenishing the SPR as maintenance on the stockpile is completed by the end of the year.