Egypt's Finance Minister Mohamed Maait gestures during a news conference in Cairo, Egypt. Photo: Reuters.

INTERNATIONAL – Egypt’s economy grew 5.6 percent in the 2018/19 fiscal year and is “on the right track” as it completes IMF-backed reforms, Prime Minister Mustafa Madbouli said on Wednesday.

The budget deficit came in at 8.2 percent of GDP, he said, which was slightly below an official forecast of 8.4 percent. 

Egypt is emerging from a three-year economic reform programme tied to a $12 billion loan from the International Monetary Fund.

Madbouli said Egypt’s primary surplus stood at 2 percent for the fiscal year, which ended in June, and also pointed to a recent drop in inflation as positive signs. Economic growth was up from 5.3 percent in 2017/18 and in line with a government forecast.

“At the same time, it induces us to complete the implementation of reforms and the efforts exerted to achieve the targets for the new fiscal year,” Madbouli said in a statement said.

Egypt has been praised by international lenders for swift reforms implemented since 2016, though austerity measures and inflation have left many Egyptians struggling to get by.

The reforms included a sharp devaluation of the currency, the introduction of value-added tax and the elimination of subsidies on most fuel products.

Headline annual inflation dropped to 9.4 percent in June from 14.1 percent the previous month, though it is expected to rise over the rest of the summer as the impact of the latest round of fuel subsidy cuts kicks in.