Cairo – Mubasher: Egypt’s gross domestic product (GDP) is expected to accelerate between 5.5% and 6% during the period between 2018 and 2020, compared to 5% last year, Capital Economics said.
Interest rates will be cut and austerity measures will be reduced in line with the decline in the inflation rate, according to a recent report.
The London-based research consultancy also projected the Egyptian pound rate to fell by 10% to EGP 20 against the US dollar until 2020.
Accordingly, the International Monetary Fund (IMF) will put pressure on the North African nation’s government to “loosen their grip on the currency”, the report added.
Capital Economics also indicated that Egypt has been the top performer in the region this year and is expected to maintain its strong momentum in 2019 and beyond on the back of the reform strategy it follows to reinforce fiscal policy and cut debt levels.
Tourism recovery and gaining further income from natural gas resources will help diminish the country’s current account deficit and adjust its balance of payments, the report said.
Inflation is likely to fall to around 10% and 7.5% by 2019 and 2020, respectively, compared to current inflation rate of 14%, it noted.
The research consultancy also projected the Central Bank of Egypt (CBE) to resume its easing cycle and cut interest rates by 550 basis points by the end of 2019 in order to boost credit growth and investment.
