The Arab Monetary Fund (AMF) forecasts that the Egyptian economy is set to see a growth of 5.5% for the current fiscal year (FY 2022/2023), a jump from its prediction of 6.3% for the previous FY.
In its Arab Economic Outlook 2022 Report released over the weekend, the fund stated that Egypt’s economy saw an uptick of 3.3% during FY 2020/2021 due to the tourism sector’s recovery, which saw revenues grow 5x during the first half of the fiscal year, recording around $5 billion.
For Arab countries as a whole, the fund revealed it expects a 5.4% growth in its financial expansion in 2022, pointing towards of high oil costs and on-going financial reforms.
Egypt’s oil balance registered a surplus of $2.1 billion, according to AMF’s report, with non-oil exports recording a 38% increase. The fund pointed out that Egypt’s program to support exporters and the speed and flexibility of the economic policies - whether monetary or financial – were important factors in supporting recovery of these sectors.
For inflation, the Arab Monetary Fund predicts that Egypt will close the year with an inflation rate of 8.5%, with a slow down in 2023 with a forecast of 7.2%.
The general level prices in Egypt in FY2022/23 will be affected by multiple factors, with the fund noting the Central Bank of Egypt’s monetary policy and the frequency of increasing interest rates to control inflation, as well as global supply chain challenges which continue to affect the prices of food commodities, particularly wheat.
The AMF also highlighted the Egypt’s intention to boost the private sector’s participation in the Egyptian economy, as well as increase foreign direct investments by localizing national industries that rely on local products.