CAIRO - Egypt's economy, buoyed by a strong revival in tourism, will grow by 5.2% in the fiscal year that ends in June 2022 and by 5.5% in 2022/23 before slowing slightly to grow 5.4% the following year, a Reuters poll showed.
After its tourist industry was devastated by the coronavirus pandemic in 2020, the economy has bounced back from the worst of the slowdown. Gross domestic product growth soared to 9.8% year-on-year in the July-September quarter from 0.7% a year earlier, planning ministry data showed.
The ministry expects growth to reach 5.6% this fiscal year, Planning Minister Hala al-Saeed said in November. Egypt is aiming for 5.7% growth in its 2022/23 fiscal year draft budget, Finance Minister Mohamed Maait said on Jan. 5.
Economists in a Reuters poll three months ago forecast growth of 5.1% this fiscal year, which ends in June.
"I think it should see a nice recovery this year. I think it will surprise how strongly tourism will recover," said Mohamed Abu Basha of EFG Hermes.
Tourism revenue plummeted to $4.9 billion in 2020/21 from $9.9 billion a year earlier as the pandemic depressed travel.
In the latest Reuters poll, economists expected annual urban consumer price inflation of 6.4% in 2021/22, 6.5% in 2022/23 and 6.2% in 2023/24 - down from October, when they predicted inflation of 7.0% for 2023/24. The central bank's inflation target range is from 5% to 9%.
Inflation accelerated to 5.9% year-on-year in December from 5.4% in December 2020, state statistics agency CAPMAS said this month.
"Inflation in Egypt is highly correlated to the exchange rate, as the economy continues to be import dependent," said Allen Sandeep of Naeem Brokerage.
The currency will weaken to 16.00 Egyptian pounds per dollar by the end of 2022 from its current rate of about 15.72, the Jan. 11-19 poll of 21 economists showed.
They expected the pound to weaken to 16.50 by the end of 2023 and to 16.73 by the end of 2024.
The central bank is expected to leave its overnight lending rate unchanged at 9.25% as of June then increase it to 9.50% by end-June 2023, the poll found.
"I feel yields will remain high until June and then cool off," Sandeep said, adding that lower rates should then spur greater consumer spending and an increase in business investment.
(Reporting by Patrick Werr; Polling by Md Manzer Hussain in Bengaluru; Editing by Catherine Evans and David Gregorio) ((firstname.lastname@example.org;))