By Patrick Werr
CAIRO (Reuters) – Economists have trimmed forecasts for Egyptian economic growth this year and next, in part due to tariffs imposed by the United States and expectations of slower global growth, a Reuters poll showed on Wednesday.
The median forecast in the April 9-23 poll of 17 economists was for gross domestic product (GDP) to grow 3.8% in the current fiscal year that ends on June 30, down from 4.0% predicted in a similar poll in January.
GDP is expected to expand 4.6% in the 2025/26 fiscal year, down from 4.7% predicted in January.
“The impact of escalating trade tensions on Egypt are mostly felt through indirect channels, i.e., through negatively impacting business and investor sentiment,” said Sri Virinchi Kadiyala of Abu Dhabi’s ADCB, adding that large external debts also weighed on Egypt.
Ivan Burgara of the Institute of International Finance, or IIF, said Egypt was relatively sheltered from U.S. tariffs.
“It has a trade surplus with the U.S., and overall trade between the two countries is small. The main shock would come via the secondary impact on global growth, particularly in Europe,” he said.
The Reuters poll forecast annual headline inflation of 20.48% in 2024/25 and 12.2% in 2025/26.
Egypt’s growth fell to 2.4% in 2023/24 from 3.8% a year earlier, according to central bank figures, dragged down by a currency crisis and the war in neighbouring Gaza, which cut into Suez Canal revenue and slowed tourism.
It regained momentum after Egypt signed an expanded, $8 billion financial reform package with the International Monetary Fund and secured $24 billion from the United Arab Emirates’ sovereign fund for real estate investment on the Mediterranean coast.
The central bank this month said preliminary indicators suggested the economy continued to recover in the January-March quarter, exceeding the 4.3% recorded in October-December 2024.
Headline inflation, which has trended downwards from a record high of 38.0% in September 2023, accelerated to 13.6% in March from 12.8% in February.
According to the median currency forecast from analysts, the Egyptian pound will weaken to 51.87 per dollar by end-June 2025, and 53.10 by end-June 2026.
Before letting it drop as part of the March 2024 IMF programme, the central bank had kept the pound fixed at 30.85 to the dollar. It now trades around 51.0 to the dollar.
The central bank’s overnight lending rate will decline to 24.25% by the end of June from 26.0% now, and to 17.75% by end-June 2026, according to analyst estimates. The bank cut its rates this month for the first time in nearly five years.
(Other stories from the Reuters global economic poll)
(Reporting by Patrick Werr; polling by Vijayalakshmi Srinivasan and Rahul Trivedi; Editing by Aidan Lewis)
