The IMF report, issued this week, discussed the future of Egypt’s economy after the January 25th revolution which ended the 30-year rule of President Hosni Mubarak.
The report said it expected that Egypt would witness only one percent in economic growth this year, with economic contraction reaching seven percent in the first quarter of the year.
However, the report said Egypt’s economy is expected to achieve six percent growth in 2014 and 2015.
Egypt’s economy was especially hard hit with slowing production and a decrease in exports, amid the unrest that followed the peaceful revolution, and a sharp fall in tourism revenue, which is a major source of foreign currency for Egypt.
The report said does not expect the Egyptian economy to witness miracles, especially with increasing inflation – which will reach 13.5 percent in the current year.
It said inflation should gradually decline in the next years to reach seven percent in 2015.
The IMF expressed fears that increasing prices of different commodities could affect Egypt’s growth rate in the future, and the prices would not decrease before 2012.
The report highlighted that the Egyptian government allocated nearly US$16 billion to subsidising petroleum commodities in the budget of 2011-2012, while allocating limited budget for supporting investments, which would affect the housing projects of low-income people and medical treatment at the expense of the state.
Egypt has already secured billions of dollars in economic assistance from the IMF, the World Bank and its oil rich Arab neighbours