Egypt’s economic growth to rebound in FY 2024/25: World Bank

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Arab Finance: The World Bank Group (WBG) expects Egypt’s real gross domestic product (GDP) growth to rebound to 4.2% in fiscal year (FY) 2024/2025 and 4.6% in FY 2025/26, according to the bank’s Macro Poverty Outlook for the Middle East and North Africa.

This is driven by an increase in investment, and enhanced private consumption, projected increase in remittances, and a gradual decline in inflation, the report revealed.

The bank also forecasts the government’s debt-to-GDP ratio to increase to 97.6% at the end of FY 2023/2024, given the valuation impact of the exchange rate depreciation, in addition to the higher deficit.

However, tax revenues are projected to decline to 12.2% of GDP in the current FY, before increasing to 12.8% and 13.4% in FY 2024/2025 and FY 2025/2026, respectively.

The report also showed that Egypt’s revenues are believed to reach 15.5% of GDP this FY, before rising to 16.5% and 16.9% in FY 2024/2025 and FY 2025/2026, respectively.

Moreover, the country’s banking system’s net foreign assets position is expected to immediately improve at least by US$11 billion,

The report outlined that Egypt’s official reserves and foreign currency assets are projected to be bolstered by FDI inflows, state asset sales, the IMF’s extended fund facility (EEF) and financing from the World Bank and other development partners.