IMF: Current account deficit in Egypt 6.2% … and low inflation, 12%

IMF: Current account deficit in Egypt 6.2% … and low inflation, 12%

CAIRO: The International Monetary Fund (IMF) predicted in its annual report on the prospects for the global economy published last Wednesday that an increase of the rate of growth of the Egyptian economy will be around five percent this year, compared to 4.7 percent last year. It said the overall Egyptian economy will continue to grow at 5.5 percent in 2011.

The report attributed this improvement, “which is clearly witnessed by the Egyptian economy in the rate of GDP growth, although the effects of economic and financial crises, world wars,” to policies of fiscal stimulus plans and fiscal policies pursued by the government.

The IMF predicted a decline in the inflation rate in Egypt this year by 12 percent and to fall next year by 59 percent, while the IMF also projects a high current account deficit from 4.2 percent of GDP in 2009 to 6.2 percent in 2010 to come back and drop again to 2.1 percent in 2011.

The report predicted that the high rate of growth in the Middle East and North Africa to 5.25 percent this year, 2010, and the fund attributed that to two factors, “high commodity prices and increased external demand, causing it to stimulate production and exports in many of the economies of the region and government spending programs that worked to revive the economy and nutrition.”

The IMF expected a return of the surplus in current accounts in the region to increase to reach 5.25 percent of GDP for the region, this year, “after last year shrank to 1.75 percent in the wake of the peak in 2008 and reached to 5.15 percent.”

Republished with permission from bikya masr