The International Monetary Fund (IMF) in its World Economic Outlook (WEO) reports predicted a 3.1% growth in emerging markets in the next two years, compared to 2.5% in 2015, Daily News Egypt reported, with Egypt expected to see a growth decline.
In Egypt, an oil-importing country, growth is expected to decrease to 3.3% in 2016, compared to 4% in 2015.
Furthermore, the current account balance in Egypt is estimated to rise to 5.3% of GDP in the 2016-2017 FY, compared to 3.7% in the current year.
Inflation in Egypt was 11% in 2015 and the IMF projects that it will decrease to 9.6% and 9.5% in 2016 and 2017, respectively.
Lastly, the IMF reports a slight rise in unemployment rate in Egypt in 2016, up to 13% compared to 12.9% in 2015, and it is expected to reach 12.4% in 2017.
Further, in comparison with the oil-rich Gulf countries, Egypt is doing fairly well, according to IMF projections. Saudi Arabia’s GDP forecast is expected at 1.2% this year, while the UAE will see a GDP growth of 2.4%, Egyptian Streets wrote.
According to the World Bank, Egypt’s economic slowdown can mainly be attributed to the foreign exchange shortage the country has suffered in the past years.
In addition, the drop in global oil prices, slowing down Gulf economies, can also have negative effects on Egypt’s economic performance. Remittances sent from Egyptian migrant workers in Gulf countries back to Egypt will slow, thus negatively affecting domestic consumption in Egypt.