Growth in Egypt’s economy is expected to remain sluggish this year as political uncertainty keeps tourists and foreign investors away, the International Monetary Fund said Tuesday.
The economy of the Arab world’s most populated country was forecast to grow by 2.7% this year after expanding by 2.1% in 2013, the IMF said in its World Economic Outlook.
“Growth in 2014 is expected to be broadly the same as in 2013, as political uncertainty will continue to weigh on tourism and foreign direct investment,” it said.
The slow performance was likely despite the “fiscal stimulus” of support from Gulf countries, which promised billions of dollars in aid to Egypt after the army ousted Islamist president Mohamed Morsi in July.
Saudi Arabia pledged $5bn in aid to the military-installed government in Cairo, with Kuwait and the United Arab Emirates offering a combined $7bn.
“Large imbalances will persist unless structural reforms and fiscal consolidation are initiated,” said the IMF, which was until last year negotiating a $4.8bn loan to Cairo to help finance the government while it undertakes reforms.
Political changes in the country have set the talks back.
Egypt’s economy grew at 5.1% in 2010, prior to the January 2011 uprising that forced president Hosni Mubarak to step down after ruling for nearly 30 years.