Macroeconomic Forecast Egypt

January 2006 | Macroeconomic Forecasts

We expect growth of 5.7% in 2006, but see the government’s 6% target as a possibility. In the light of Q305 inflation data, we have revised our 2005 consumer price inflation estimate down to 3% y-o-y in ‘end of period’ terms. Average inflation will be closer to 5% as y-o-y inflation averaged 5.3% in the first 10 months of 2005. However, inflation will rise in 2006 as the government is likely to cut fuel subsidies. There is a further upside risk: if the central bank ends intervention in currency markets, inflation will rise further as the currency will

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