Macroeconomic Forecast Egypt

June 2006 | Macroeconomic Forecasts

Real GDP growth came in at a robust 6.1% y-o-y in the second quarter of FY05/06, up from 4.7% y-o-y in the previous period, according to official statistics. We expect growth of at least 5.5% for fiscal year 2006, stimulated by loose fiscal and monetary policy. Moreover, we see strong growth continuing into FY2006/07, which begins in June amid rising business confidence and ongoing economic reforms. Multilateral View: Following its recent Article Four review of the economy, the IMF acknowledged that Egypt's economic growth was 'accelerating', though its latest forecasts had not yet been published as we went to press, and noted 'Job creation is the paramount challenge facing the Egyptian authorities today'. Latest data from the IMF show Egypt's foreign exchange reserves stood at US$20.6bn at end-2005, marginally above our forecast of US$20.2bn.

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