Egypt’s economic growth is expected to slow to 5.5 per cent in the current fiscal year that began this month, below the government’s target, and 5.8 per cent the following year, a Reuters poll showed.
The forecasts were similar to a Reuters survey of economists released three months ago but fiscal 2019/20 growth was seen lower than the government’s target of 6.0 per cent.
Prime Minister Mostafa Madbouly said last week Egypt’s gross domestic product (GDP) grew 5.6 per cent in the 2018/19 fiscal year, a bit higher than the 5.5 per cent expected in the April Reuters poll.
Barring the oil industry, Egypt’s economy has struggled to attract foreign investors since the 2011 uprising that ended Hosni Mubarak’s 30-year rule, reports Reuters.
Egypt’s non-oil private-sector activity contracted for the second consecutive month in June, according to the Emirates NBD Egypt Purchasing Managers’ Index (PMI).
Private-sector activity has expanded in only five months over the last three years.
Median forecasts from the poll showed predicted 5.8 per cent GDP growth in the fiscal year ending in June 2021 and 5.5 per cent in the 2021/2022 fiscal year.
The new consensus sees Egypt’s urban consumer inflation at 13.0 per cent in the 2019/20 fiscal year, down from the 14.2 per cent predicted three months ago for the prior fiscal year.
Annual urban consumer price inflation plunged unexpectedly to 9.4 per cent in June from 14.1 per cent in May, before fuel prices were raised.
Analysts expect headline inflation to decelerate to 10.9 per cent in the 2020/21 fiscal year and 9.0 per cent in the 2021/2022 fiscal year.
Core inflation, which strips out volatile items such as food, fell to 6.4 per cent in June from 7.8 per cent in May.
Millions of Egyptians live below the poverty line and struggle to meet basic needs. They have faced rising costs since the pound was devalued in November 2016.