Cairo - Mubasher: Capital Economics expects the pace of fiscal consolidation in Egypt to slow, which will support a pick-up in economic growth.
The research firm further forecast that Egypt would see a growth rate of its gross domestic product (GDP) of 5.5% in 2018 and 5.8% in 2019.
The government has made progress in cutting the budget deficit in recent years, despite that public finances are still in a poor state, and the debt ratio is now falling, Capital Economics said in a report issued on Thursday.
The budget deficit reached 9.8% of GDP last fiscal year, exceeding the 9.1% of the targeted level, and the International Monetary Fund (IMF) projects of 8.5%.
However, the deficit reached its best level in six years and decreased compared with its level in fiscal year 2016/2017 of 10.9%.
Capital Economics previously estimated that the interest bill will decline by 0.5 to 1.0% of GDP over the next couple of years, and with the pace of fiscal consolidation looking set to slow in the coming years, the cyclical upturn in Egypt’s economy has further to run.
