Egypt's economy will grow 5. 1% in June 2022: poll

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Egypt's economy will grow 5. 1% in June 2022: poll

CAIRO Reuters - Egypt's economy will grow 5.1% in the fiscal year ending June 2022, but accelerate to 5.5% in each of the following two years as tourism continues to rebound and the effects of the coronavirus pandemic wane, a Reuters poll showed.

The central bank said last month economic growth surged to 7.7% in the final quarter of the last fiscal year, indicating growth of 3.3% for the entirety of 2020 21, up from a previous full fiscal-year estimate of 2.8%.

In a July poll, economists predicted that economic growth would be 5.0% for the year to June next.

We expect consumption growth to pick up from a strong base post-COVID and public investment to remain low this year, Allen Sandeep of Naeem Brokerage said.

What will be critical to see is if this growth is sustained in 2022, when pandemic effects should hopefully subside substantially. Tourism has gradually recovered from COVID travel restrictions introduced in March 2020.

Tourism revenue fell to $9.9 billion in 2020 21 from $4.9 billion a year earlier. Egypt's annual inflation rose to 6.6% year-on-year in September, its highest in 20 months, from 5.7% in August, mainly due to rising food prices, state statistics agency CAPMAS said this month.

The currency will weaken to 15.81 Egyptian pounds per dollar by the end of 2021, to 16.25 by the end of 2022 and to 17.24 by the end of 2023, according to the Oct. 8 - 20 poll of 22 economists.

The central bank is expected to leave its overnight lending rate unchanged at 9.25% throughout 2021 22 and 2022 23, then increase it to 10.25% by the end of June 2024, the poll found.

We believe Egypt's large CA current account deficit explains the central bank's reluctance to cut interest rates, causing a strong increase in imports and income outflows, RenCap's Yvonne Mhango wrote in a note.