The International Monetary Fund (IMF) has changed its economic projections for Egypt, anticipating a recovery in the country’s GDP to 4.1% for FY2025/2026, a significant increase compared to its FY2024/2025 forecast of 2.7%.

The fund revealed that Egypt recorded a real GDP of 3.8% in FY2023/2024, 1.1% higher than the IMF's earlier projection of 2.7% in July.

In the IMF’s latest World Economic Outlook report released on Tuesday, the IMF highlighted concerns about the current account balance, expected to reach -6.6% in FY2024/2025 and -6.4% in FY2025/2026.

Inflation continues to pose a significant challenge, with consumer price inflation recorded at 24.4% in FY2023/2024, while the IMF projects a rise to 33.3% in FY2024/2025 before declining to 21.2% in FY2025/2026.

Pierre-Olivier Gourinchas, the IMF's chief economist, expressed optimism, stating, “The battle against inflation is almost won,” pointing out that inflation in many countries is nearing central bank targets.

“The decline in inflation without a global recession is a major achievement,” Gourinchas wrote in a blog post that accompanied the IMF's latest World Economic Outlook.

Regionally, the outlook remains mixed, with the Middle East and Central Asia expected to see a 0.3% decline in GDP share by 2024, influenced by commodity production disruptions and geopolitical tensions.

Last week, the World Bank adjusted its growth forecast for Egypt, now estimating a 2.5% growth rate for FY2024/2025, a decrease from a previous estimate of 4.2% made in June, but expects a rebound to 3.5% by FY2025/2026.

The IMF's Executive Board is set to review Egypt’s $8 billion loan program in November. If approved, this review will unlock $1.3 billion as the fourth tranche of the loan, which represents the largest segment acquired to date.