IMF cuts Egypt's growth forecast to 4.2% amid regional conflict pressures

The International Monetary Fund IMF has reduced its growth forecasts for Egypt, citing increased economic strain from ongoing regional tensions and higher global energy prices. In its World Economic Outlook report released on Tuesday, the IMF revised Egypt’s expected growth for the current fiscal year down to 4.2 percent from 4.7 percent in its January estimates. Projections for the next fiscal year were also lowered to 4.8 percent from a previous forecast of 5.4 percent. This downgrade is attributed to the economic impact of the conflict involving Iran, which has led to increased energy and commodity prices and disruptions in key trade routes. The IMF also significantly lowered its outlook for the Middle East and Central Asia, forecasting regional growth at 1.9 percent this year, a decrease from 3.9 percent previously. Oil- and gas-exporting countries have been particularly affected, especially following disruptions related to the Strait of Hormuz since late February. Despite a weaker near-term outlook, the IMF anticipates a regional rebound next year, projecting growth of 4.6 percent. However, this recovery is contingent on a return to normal energy production levels and the resumption of shipping activity in the Strait of Hormuz, conditions that remain uncertain if the conflict persists. In recent months, Egypt’s economy has shown some resilience, with data from the Ministry of Planning and Economic Development indicating that GDP growth accelerated to 5.3 percent in the s