IMF cuts Egypt's growth forecast citing concerns on tourism revenues

The International Monetary Fund cut its growth forecast for the Egyptian economy on the back of security concerns affecting vital tourism revenues.

The economy is expected to grow 3.5 percent in the fiscal year starting July 2014, the IMF said today in its October 2014 Middle East and Central Asia Economic Outlook report, down from 4.1 percent predicted last April.

Growth for the fiscal year ending 30 June 2014 was 2.2 percent,.

The IMF partially attributed its forecast cuts to security issues "keeping tourism a way from Egypt and hampering Egyptian gas exports" that offset the recovery sensed in the country's manufacturing activity and foreign direct investment (FDI) flow.

Structural issues, such as electricity supply disruptions, further weakening of private investment confidence in the Egyptian economy, are also to blame the international lender said.

The past two consecutive governments in Egypt have been trying to revive an economy battered by political instability and violence since a popular uprising forced president Hosni Mubarak to step down in 2011.