Country Economic Forecasts > Egypt Arab Rep

Parliamentary elections are set to start on 17 Octoberbut there islittle prospect that the new legislature will be any kind of check on executivepowers, leaving open concerns about increasing radicalisation amongIslamists and ever-harsher restrictions on political and civil liberties beingimposed by the authoritarian government led by President Sisi. In addition, theworrying fiscal issues combined with a highly centralised decision-makingsystem and the obligations that the government has towards business interests maymake policy-making unpredictable, while also perhaps making space for corruption.On the economic front, GDP growth was 4.2% in the 2014/15 fiscal year, butthere was a sharp slowdown to under 3% in H2. We expect growth to slow to 3.3%in 2015/16, with similarly modest rates in the next two years. At the sametime, the twin deficits remain worryingly high, with the current accountdeficit close to 4% of GDP and the budget deficit over 10% of GDP, leaving thecountrys finances vulnerable to any further setbacks. But the recent Eni gasfind in the Mediterranean, possibly the largest in the region, could help tobolster growth and balance of payments prospects over the medium term.