Macroeconomic Forecast Egypt

July 2006 | Macroeconomic Forecasts

BMI View: We have nudged out 2006 GDP forecast up to 5.7% in the light of promising H1 data. There are also upside risks to our 2006 inflation forecast of 4.5% as monthly consumer price index (CPI) inflation has been rising for most of the year to date. CPI inflation rose from 3.3% y-o-y in January 2006 to 5.2% in May. Nonetheless, wholesale price inflation appears to be contained, having actually recorded a small drop of -0.6% in March (the latest month for which data is available). Moreover, we expect a limited degree of monetary tightening to help slow inflation in the second half of the year. As a result, we are leaving this forecast unchanged for now.

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