EGYPT –The International Monetary Fund (IMF) in its latest world economic outlook has raised its forecasts for Egypt, projecting a growth of 3.5% despite of the economy-crippling challenges that have been posed by the COVID-19 pandemic.
At a projected growth rate of 3.5%, Egypt distinguishes itself as one of the few economies maintaining their growth trajectory at a time when the rest of the world is experiencing economic downturns.
The IMF in its latest world economic outlook projected that cumulatively, the global economy is expected to contract by 4.4%, the worst annual decline since the Great Depression of the 1930’s.
Egypt’s projected growth comes as a clear indication of the success of the country’s structural and economic reform measures and the success of the government’s plan in tackling the challenges posed by the “Covid-19” pandemic.
IMF in its outlook expected that the Egyptian economy would achieve growth rates of 5.6 percent over the medium term by 2025.
The international fund also lowered the country’s unemployment rate forecast to 8.3 percent, down from 10.3 percent in an earlier forecast.
IMF also expects Egypt’s current account deficit to decline to 3.2 percent of GDP in 2020 from 4.3 percent in previous forecasts and is projected to drop to 2.5 percent in 2021 before stabilizing at 0% in 2025.
In its previous report released in June, the IMF announced that the Egyptian economy was included in a list of the 30 largest economies, representing 83 percent of the global gross product.
In the same report, the Fund expected that only Egypt and China would succeed in achieving positive growth during 2020, despite economic and health challenges imposed by the “Covid-19” pandemic, which pushed most countries of the world into a sharp contraction.
At the global stage, IMF noted that eased lockdowns and the rapid deployment of policy support at an unprecedented scale by central banks and governments around the world has helped bring the global economy back from the depths of collapse.
“This crisis is however far from over as there still remains tremendous uncertainty around the outlook,” Gita Gopinath, IMF Economic Counsellor and Director of the Research Department.
According to Gopinath, the virus is still re-surging with localized lockdowns being re-instituted.
If this worsens and prospects for treatments and vaccines deteriorate, the toll on economic activity would be severe.
Growing restrictions on trade and investment and rising geopolitical uncertainty could also harm the recovery.
On the upside, faster and more widespread availability of tests, treatments, vaccines, and additional policy stimulus can significantly improve outcomes.
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