Egypt’s budget deficit likely to fall to 6.3% of GDP – IMF
The International Monetary Fund (IMF) is expected to narrow down its forecast for Egypt’s budget deficit by the end of fiscal year (FY) 2021/2022, according to the IMF’s latest Fiscal Monitor Report.
The decline is projected to be at a slower pace over the coming years as compared to previous expectations, the IMF said in its report.
The IMF expects that Egypt’s budget deficit would shrink to 6.3% of gross domestic product (GDP) by the end of FY2021/2022, compared to 7.3% in FY 2020/2021.
Moreover, the fund projects that the deficit would maintain declining to 4.4% of GDP in FY 2025/2026.
Primary surplus is expected to improve slightly to record 1.7% of GDP by the end of FY 2021/2022, as compared to the previous forecast of 1%, the report showed.
Meanwhile, public spending is projected to increase to 27.4% of GDP in FY 2021/2022, versus 27.2% that was recorded in FY 2020/2021.
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The country’s gross debt is projected to fall until FY 2025/2026 when it reaches 74.1%.
The IMF expects revenues to grow to 21% in FY 2021/2022 and to reach 21.6% in FY 2025/2026.
On the other hand, healthcare spending are likely to edge up by 0.2% in 2020-2030.
Furthermore, the report forecast a decrease of 2.1 in interest rate growth from 2021 to 2026.
It is worth noting that the IMF raised its forecast for Egypt’s economic growth during FY 2020/2021 to 3.3%, versus its expectation announced in July of 2.8%, according to its latest world’s economic outlook report.
The IMF also maintained its forecast regarding the economic growth of Egypt in FY 2021/2022 at 5.2%.
Regarding the inflation rate, the IMF forecasted that Egypt’s inflation rate would grow to 6.3% in FY 2021/2022, versus 4.5% in FY 2020/2021.
