The International Monetary Fund (IMF), in its report on global economic growth prospects in 2022, raised its forecast for the growth of Egypt’s economy at a rate of 0.4% for the fiscal year 2021-2022 to 5.6%, and the same for the fiscal year 2022/23.
According to the expectations of the new report, the Fund raised the growth of the economies of the Middle East and North Africa by 0.3% to 4.4% in 2022, from the expectations of October 2021, compared to an estimated growth of 4.1% in 2021. It also expected that the growth of the region would decline in 2023 to 3.4%.
The Fund kept its forecast for the growth of the economy of Saudi Arabia in 2022 at 4.8%. However, it will drop significantly to 2.8% in 2023.
In contrast, the Fund cut its US growth forecast by 1.2% given US President Joe Biden’s failure to pass a massive social and climate spending package, earlier US monetary policy tightening and continued supply shortages.
The IMF said the US economy is now expected to grow by 4% in 2022 after expanding 5.6% in 2021, with growth slowing to 2.6% in 2023.
It cut China’s forecast by 0.8% to 4.8% in 2022 after 8.1% growth in 2021, with growth rising again to 5.2% in 2023, noting that the disruptions caused by the pandemic and related to China’s zero-tolerance policy and financial pressures extended among real estate developers prompted a rating downgrade.
It also cut its forecast for the eurozone by 0.4% to 3.9% in 2022, and said growth there would slow to 2.5% in 2023.
India and Japan saw their expectations upgraded somehow.
The Fund cut 1.2% per its 2022 growth forecast for Brazil and Mexico, Latin America’s largest economies. Brazil is now seeing 0.3% growth this year and Mexico 2.8%, while the region is expected to grow by 2.4%, 0.6% lower than the previous forecast.
COVID & Growth
IMF has warned that the emergence of new variant could prolong the pandemic and lead to renewed economic turmoil, while supply chain disruptions, energy price volatility and domestic wage pressures pose more risks.
It revised inflation forecasts for 2022 for both advanced and developing economies, and said high price pressures are likely to persist longer than previously forecast given ongoing supply chain disruptions and rising energy prices.
IMF said that the inflation rate is expected to reach 3.9% in advanced economies and 5.9% in emerging markets and developing economies in 2022 before receding in 2023, supported by moderate growth in fuel and food prices during that period.