IMF Raises Forecasts for Egyptian Pound This Year

The International Monetary Fund (IMF) has raised its exchange rate forecast for the Egyptian pound for the current fiscal year, recording an average dollar rate of 52.14 pounds, compared to 54.3 pounds in its previous April forecast.

In contrast, the IMF raised its dollar forecasts for subsequent fiscal years, projecting an average of 55.96 pounds in 2027/2028, 57.02 pounds in 2028/2029, 57.76 pounds in 2029/2030, and 58.51 pounds in 2030/2031, compared to 55.8 pounds, 56.8 pounds, 57.65 pounds, and 58.45 pounds, respectively, in previous forecasts.

The IMF also raised its forecast for Egyptian economic growth to 4.7 percent for the current fiscal year, up from 4.4 percent in its previous estimates, according to the World Economic Outlook report reviewed by Al Arabiya Business.

The fund expects inflation to average 14.8 percent in the current fiscal year, compared to 13.3 percent in the previous fiscal year, and anticipates the current account deficit will widen to 4.9 percent of GDP, up from 4.4 percent in the previous fiscal year.

The World Bank had previously raised its forecast for Egyptian economic growth in the current fiscal year to 4.3 percent, up from 4 percent in its April estimates.

It projected per capita GDP growth of 2.5 percent in the current fiscal year, with inflation averaging 14.2 percent. It also forecast a decline in the current account deficit from 4.7 percent of GDP in the previous fiscal year to 4.2 percent in the current fiscal year.

Furthermore, it anticipated the budget deficit would decrease to 6.5 percent of GDP, compared to 6.8 percent estimated for the previous fiscal year.

The bank stated that growth rose to 5.1 percent in the previous fiscal year, supported by lower inflation, strong private consumption and investment, and the recovery of extractive industries.

The IMF’s forecasts align with those of Standard & Poor’s, the credit rating agency, which expects the pound to stabilize at 52 pounds by the end of the current fiscal year, reaching 55 pounds by the end of the next fiscal year, and 57 pounds by June 2029.

Standard & Poor’s expects Egyptian economic growth to slow to 4.5 percent in fiscal year 2027, amid ongoing shipping disruptions related to the war, which will increase pressures on trade, logistics, and import prices. It also anticipates a decline in consumption and investment amid continued uncertainty and high inflation.

The agency forecast that Egypt’s budget deficit would continue to narrow in the current fiscal year, reaching 5.6 percent, before declining to 5.2 percent of GDP in the fiscal years 2027-2028 and 2028-2029.

The US dollar recorded a new high against the Egyptian pound in yesterday’s trading, as the US currency continued to approach a record level of 53 pounds, driven by the dollar’s strength in global markets and investors’ efforts to hedge.

According to a compilation by Al Arabiya Business, the highest dollar exchange rate was at Commercial International Bank (CIB) at 52.75 pounds for buying and 52.85 pounds for selling. The lowest rate was at Abu Dhabi Islamic Bank at 52.38 pounds for buying and 52.48 pounds for selling.

At Banque Misr, Al Baraka Bank, Banque Misr Al Iskandariya, Next Bank, and Suez Canal Bank, the dollar was priced at 52.70 pounds for buying and 52.80 pounds for selling. At Arab African International Bank and Banque Misr Al Arabi, the dollar was priced at 52.69 pounds for buying and 52.79 pounds for selling.