The International Monetary Fund (IMF) has maintained its projection for Egypt’s real GDP

growth in 2024 at three percent, declining by 0.8 percent compared to the estimation of 2023.

The IMF also expects the country’s GDP growth to rebound to 4.4 percent in 2025, according to
the World Economic Outlook report released on Tuesday.

As per the report, Egypt’s inflation is projected to reach its peak of 32.5 percent in 2024, before
shrinking to 25.7 percent in 2025.

In April following the completion of the first and second reviews under the IMF’s ongoing
extended $8 billion loan deal for Egypt, the IMF expected the county’s inflation rate to average
25.5 percent in the upcoming FY2024/2025 and decrease to 15.2 percent by the end of the same
fiscal year.

The IMF attributed its projections to the tightening of the monetary policy and the appreciation
trend of the local currency.

The IMF extended its loan deal with Egypt from $3 billion to $8 billion in March in response to
the harsh impacts of the tensions in the Middle East on the country’s economy.

The third review of the programme is scheduled to be completed by the end of June, while the
remainder five reviews until 2026 are to be completed every six months, with each enabling
Egypt to access an amount of $1.3 billion.

Meanwhile, the report expects the country’s current account balance to jump to 6.3 percent in
2024, up from 1.2 percent posted in 2023, and to significantly decline to 2.4 percent in 2024.

The current account balance is the sum of net exports of goods and services, net primary income,
and net secondary income.

This projection places Egypt third among the oil importer countries in the Middle East and
Central Asia region.

For unemployment, the report expects its rates to decline to 7.1 percent in 2024 and to seven
percent in 2025, down from 7.2 percent registered in 2023. As per the readings, Egypt is
expected to have the second-lowest unemployment rate until 2025.

On a regional level, the report projects the real GDP growth of the Middle East and North Africa
at 2.7 percent and 4.2 percent in 2024 and 2025, respectively, compared to 1.9 percent in 2023.

For the region’s inflation rate, the report expects it to gradually decline to 15.4 in 2024 and 12.4
percent in 2025, down from 16 percent posted in 2023.

Globally, the report revised up the world’s real GDP growth from 3.2 percent in 2023 to 3.3
percent in 2024.
“The pace of expansion is low by historical standards, owing to both near-term factors, such as
still-high borrowing costs and withdrawal of fiscal support, and longer-term effects from the
COVID-19 pandemic and Russia’s invasion of Ukraine; weak productivity growth; and
increasing geoeconomic fragmentation”, the report explains.

The report expects global headline inflation to drop from an annual average of 6.8 percent in
2023 to 5.9 percent in 2024 and 4.5 percent in 2025. In this respect, the report highlights that the
advanced economies are returning to their inflation targets sooner than emerging markets and
developing economies.

Moreover, the report noted that its latest forecast for global growth five years from now––at 3.1
percent––is at its lowest in decades.

“The pace of convergence toward higher living standards for middle- and lower-income
countries has slowed, implying a persistence in global economic disparities. The relatively weak
medium-term outlook reflects lower growth in GDP per person stemming, notably, from
persistent structural frictions preventing capital and labour from moving to productive firms”, the
report noted.

Concerning global inflation, the report said that headline inflation neared its pre-pandemic level
in the majority of economies in late 2023 for the first time since the start of the global inflation
surge, averaging 2.3 percent on a quarter-over-quarter annualized basis, down from a peak of 9.5
percent in the second quarter of 2022.

“For emerging market and developing economies, inflation was 9.9 percent in the last quarter of
2023, down from a peak of 13.7 percent in the first quarter of 2022, but this average was driven
by high inflation in a few countries; for the median emerging market and developing economy,
inflation declined to 3.9 percent. This progress notwithstanding, inflation is not yet at target in
most economies”, the report explains.

The report projects global headline inflation to shrink from an annual average of 6.8 percent in
2023 to 5.9 percent in 2024 and 4.5 percent in 2025.

World trade growth is projected at three percent in 2024 and 3.3 percent in 2025, with revisions
of a 0.3 percent decrease for 2024 and 2025 compared with the IMF’s January 2024 projections.

In this regard, the report explains that world Trade growth is expected to remain below its
historical annual average growth rate of 4.9 percent in the medium term from 2000 to 2019,
reaching 3.2 percent in 2029.

“This projection implies, in the context of the relatively low outlook for economic growth, a ratio
of total world trade to GDP (in current dollars) that averages 57 percent over the next five years,
broadly in line with the evolution in trade since the global financial crisis”, according to the
report.
Egypt’s overall debt to GDP is expected to decline to 82.6 percent of GDP in 2025, from over 90
percent in 2024, and will continue to shrink under the country's loan program with the
International Monetary Fund (IMF), the Director of the Middle East and Central Asia Department
at the IMF, Jihad Azour, told Ahram Online.

Azour made these remarks during a press briefing the IMF held on Thursday to release its
Regional Economic Outlook report on the sidelines of the annual meetings (Spring Meetings) of
the World Bank Group and the IMF in Washington.

He was responding to a question by Ahram Online about the IMF’s projections for Egypt’s
overall debt and how Egypt is expected to tackle the debt path under the IMF’s loan program.

“This is one of the main pillars of our program with Egypt, which involves allowing Egypt to
reduce gradually the burden of debt, the size of the debt to the GDP, and the debt service,” Azour
told Ahram Online.

Egypt is currently engaging in an $8 billion Extended Fund Facility (EFF) loan program.

Azour pointed out that the increase in interest rates globally led to a further increase in debt
service for several emerging and middle-income economies in the region.

The IMF, he said, strongly recommends that these countries address this issue decisively and
move forward with the needed reforms to allow risk premiums to go down and also reduce the
nexus of all the burdens these reforms when it comes to debt and debt restructurings could have
on the local financial system.

In this respect, Azour stressed to Ahram Online that Egypt is excluded from countries with
fragilities and vulnerabilities regarding their debt burdens.

Under the program, Egypt is expected to tame the debt level to below 80 percent by 2027.
 Real GDP Growth Rate
8

7 6.7

5
3.8
43.6 3.3
3
3

0
2020 2021 2022 2023 2024

GDP in Billion U.S. Dollars

475.23
475
423.3
425 382.52 398.4
375 357.82
325
275
225
175
125
75
25
2020 2021 2022 2023 2024
GDP in Billion U.S. Dol- 382.52 423.3 475.23 398.4 357.82
lars
 Inflation Rate
35 32.5

30
24.4
25

20

15

10 8.5
5.7
4.5
5

0
2020 2021 2022 2023 2024

Unemployment Rate
8.48.3
8.2
8
7.8
7.6
7.4 7.3 7.3
7.2
7.2 7.1
7
6.8
6.6
6.4
2020 2021 2022 2023 2024