Analysis by Region - Africa - Egypt
Inflation continued to tick higher in March, fuelling ongoing demand weakness in the non-oil sector. Although firms were hopeful that inflation would soon peak, we doubt this will be the case, especially amid growing rumours of another devaluation after Ramadan. The IMF also appears to have missed a soft deadline for the first review of the Extended Fund Facility (EFF), as media reports suggest that the multilateral institution would like to see more reforms carried out first. Although we have revised our forecast for real GDP growth upward by 0.5 pt to 1.8% this year, this only reflects favourable base effects resulting from a stronger-than-expected historical GDP figure for 2022. We still think that economic activity has slowed significantly in H1 2023, and recent developments do not give any reason for optimism.
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