Cairo - Mubasher: World Bank has raised Egypt’s growth rate forecast in 2016 to 3.8% from an earlier forecast of 3.3%.

The economic growth will be pushed by the recovery in local demand as consumption remains strong, but imports is still challenged by the scarcity of foreign exchange and an overvalued pound, the Bank said in its latest report.

The country’s foreign currency reserves plunged from $36 billion before January 2011 to $15.54 billion by the end of July 2016.

According to the report, World Bank expects a steady growth for the Egyptian economy on the medium run, as the government continues its economic recovery plan and the reduction of the budget deficit.

The Egyptian finance ministry says the total budget deficit for the fiscal year 2015-2016 is around EGP 319.46 billion.

Egypt's local debt reached EGP 2.49 trillion by March 2016, while external debt stood at $53.4 billion by the third quarter of FY2015-16, according to the Central Bank of Egypt’s (CBE) database.

The World Bank also said that the rise in energy prices and the new value added tax could plunge the inflation on the short run, leaving a negative effect on low and middle income families.

The CBE said in September that the basic inflation rate grew by 13.25% in August, while Egypt’s consumer price index (CPI) increased to 16.4% in August according to the Central Agency for Public Mobilization and Statistics (CAPMAS).