Cairo – Mubasher: Egypt’s economic growth is likely to remain robust at around 5% in both fiscal year 2017/2018 and FY18/19.
This was mainly driven by the “improved policy-setting, the more competitive currency, rising tourism, falling inflation and interest rates, and progress on reforms”, in addition to growth in natural gas output according to a recent report released by National Bank of Kuwait (NBK).
The Kuwaiti lender also expected that the increase in natural gas production from the offshore Zohr gas field will push up the North African nation's economic growth, as the supergiant field's gas production could reach 2.7 billion cubic feet per day by the end of 2019 and add 2% to the level of gross domestic product (GDP).
It is worth noting that Egypt's GDP rose to 5.2% year-on-year during the first half of FY17/18, compared to a growth of 3.6% in FY2016/17 and 2.3% a year earlier, the report added.
The bank said that the country’s state budget for FY18/19 seeks a deficit of 8.4% of GDP on the back of anticipated higher revenues.
Moreover, the recent fuel and electricity subsidy cuts are projected to boost inflation to average 21% in FY2017/18 and ease to 10% in FY2018/19, the report noted.
The Central Bank of Egypt (CBE) had slashed interest rates by 200 basis points in H1-18 as a result of the decline in inflation, keeping overnight deposit and lending rates unchanged at 16.75% and 17.75%, respectively in its last meeting, according to the report.
Earlier this month, prime minister Mostafa Madbouly said that Egypt's GDP rose by 5.4% during FY17/18, adding that the Egyptian government aims a GDP growth of 8% by FY21/22.
