IMF expects Egypt to contribute 1.7% to global growth

The Egyptian economy is expected to contribute around 1.7 percent to the growth of the global economy over the next five years, according to a Bloomberg calculation done on data released in the International Monetary Fund's World Economic Outlook.  

This places the North African country in the ninth rank among the largest countries contributing to the expansion of the world economy until 2028.  

China is expected to be the biggest growth driver over the next five years with 22.6 percent share, according to Bloomberg calculations.

It will be followed by India and the US which are expected to contribute 12.9 percent and 11.3 percent to the global economy. 

Earlier this month, the IMF cut its forecast for Egypt’s real gross domestic product for the current fiscal year to 3.7 percent from its previous projection of 4 percent.

The IMF's economic outlook report predicts the country’s real GDP growth for 2023/2024 to reach 5 percent, down from a previous forecast of 5.3 percent.

Egypt’s inflation is also expected hit 21.6 percent in 2023 before dropping to 18 percent next year, IMF report stated.

This saw the credit agency S&P Global downgrading the Egypt’s outlook to negative as the country's funding sources may not cover its high external funding requirements of $17 billion in the fiscal year ending June 30, 2023, and $20 billion in fiscal 2024.   

The country’s long and short-term foreign and local currency sovereign credit rating remained at “B/B”, noted the agency.   

“The negative outlook reflects risks that the policy measures implemented by Egyptian authorities may be insufficient to stabilize the exchange rate and attract foreign currency inflows to meet the sovereign fund’s high external financing needs,” S&P Global Ratings said in a report.