World Bank President Jim Yong Kim takes to the stage to deliver remarks at the plenary session at the IMF-World Bank annual meetings at Constitution Hall in Washington October 10, 2014. REUTERS/Jonathan Ernst
CAIRO – 10 January 2018: Egypt’s economy is projected to expand by 4.5 percent in fiscal year 2017/18 (to end June 30), boosted by continuous reforms and improved business climate, the World Bank (WB) predicted in a Wednesday report.
In its “Global Economic Prospects”, the WB said that Egypt’s growth remained broadly stable at 4.2 percent in FY 2016/17 (ended June 30, 2017). The WB’s forecast for 2017/18 came in line with the International Monetary Fund’s (IMF) projections.
“An exchange rate devaluation had a positive impact on competitiveness in that country, contributing to strong industrial production, investment, and exports in the second half of the fiscal year,” the WB said.
The international organization expected that the ongoing economic reforms along the improved business circumstances would bring in further momentum to industrial sectors and exports.
To tackle escalating and chronic macro-economic hardships, Egypt’s authorities launched an ambitious reform program in November 2016 to reinstate macroeconomic stability and promote inclusive growth to revive an economy that has, since 2011, been hit by political instability and regional security concerns.
Cairo had to apply a set of procedures as a part of its comprehensive reform program endorsed by the IMF; including free floating the pound and slashing energy subsidies. These reforms were preceded with approving a civil service law and introducing a long-awaited value added tax (VAT) with the aim of raising LE 32 billion in annual revenues.
For the Middle East and North Africa (MENA) region, the WB report said the growth has dropped sharply to 1.8 percent in 2017 from 5 percent the year before.
“The slowdown in growth among oil exporters, driven by oil production cuts and continued geopolitical tensions, has more than offset a pickup among oil-importing economies. Fiscal adjustments also held back growth among both oil-importing and oil-exporting economies in the region,” the report read.