20 Jun 2022

A recent report by Fitch Solutions took on a pessimistic view of the economic prospects of North African countries. The report predicted that surging inflation due to the Russia-Ukraine conflict will weigh on private consumption, and higher energy and food prices will weaken nations’ fiscal and external positions. Fitch expects North Africa’s GDP growth to decelerate to 4.6% in 2022 and 3.8% in 2023, down from 5.4% in 2021.

Fitch cautiously sees Egypt as a seeming exception to this regional trend, although economic conditions will still weaken, albeit at a slower pace than most of its neighbors. They forecast GDP growth of 6.2% in FY21/22, reflecting the 9.1% growth rate witnessed in 1H21/22 and a 3.6% rate projected for 2H21/22. Fitch also lowered their forecast for FY22/23 GDP growth from 5.5% down to 4.4%. They cite double-digit inflation that is burdening household incomes, a decrease in public investments, and incomplete recovery in the tourism sector as the main contributing factors to their revised projections. (Sources: Fitch Solutions (English), Zawya (English), al-Ahram (English), Akhbar al-Youm