Egypt's economy seen growing 5.3% in year ending in June


CAIRO – Egypt's economy is expected to grow 5.3 percent in the fiscal year, according to Reuters.

The economy, with the exception of the oil sector, has struggled to attract foreign investors since 2011 uprising that unseated Hosni Mubarak.

Egypt's non-oil private-sector activity shrank for a fourth month in December. Private-sector activity has expanded in the last few years.

"Medium-term growth remains a strong grip on the economy," said Nadene Johnson, an economist at NKC African Economics.

Hoping to bolster investor confidence, Egypt has been implementing tough economic reforms as part of a three-year, $ 12 billion deal agreed with the International Monetary Fund in November 2016. The reforms include a value-added tax, cuts to energy subsidies and a steep currency devaluation.

The median forecast from 14 economists polled Jan. 8-22 put growth at 5.3 percent in the current 2018/2019 fiscal year and 5.5 percent the following two fiscal years.

Egypt had targeted growth at 5.8% in its 2018/2019 fiscal year budget.

"Egypt should enjoy a relatively stable pace of growth over the next couple of years … the economy will remain strained by ongoing fiscal consolidation, soft private sector activity and uncertainty in the global economy," wrote Maya Senussi, senior economist for the Middle East at Oxford Economics.

"That said, we are seeing greater support from this investment, lowering subsidy spending." Consumers also stand to gain from lower prices, "said she said. .

The latest consensus put urban consumer inflation at 15.5 percent in 2018/2019, up from a previous forecast of 14.9 percent. Economists polled is expected to fall to 13.1 percent in the 2019/2020 fiscal year and 10.9 percent in the 2020/2021 fiscal year.

Annual urban consumer price inflation fell to 12.0 percent in December from 15.7 percent in. Core inflation, which strips out volatile items such as food, rose to 8.30 percent in December from 7.94 percent.

Millions of Egyptians live in the poverty line and struggle to meet basic needs. They have faced rising costs since the pound was floated in November 2016.

"However, there are some risks to further tightening of global conditions (particularly US interest rate tightening)" and weigh on the value of the pound, "Johnson said.

(Other stories from the economic outlook polls: urn: newsml: *: nL3N1Z92BI)

(Polling by Manzer Hussain, writing by Yousef Saba, editing by Larry King) ((; +201222184730))


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