Africa News Broadcast 
Despite its significant economic recovery, Egypt continues to face persistent challenges, including high inflation, a weak currency, and concerns over external debt. “Egypt’s economy has impressively moved out of intensive care,” stated Hasnain Malik, head of emerging markets strategy at Tellimer.
At the year’s start, Egypt’s economy, burdened by debt, teetered on the edge after two years of stagnation. However, a series of reforms, including a 40% devaluation of the Egyptian pound in March, secured an $8 billion package from the International Monetary Fund (IMF), an additional $8 billion bailout from the European Union (EU), and a $35 billion investment from the United Arab Emirates (UAE).
Egypt has not yet entered the international bond markets, which would indicate a resurgence of investor confidence. Nonetheless, foreign investment has persisted in other forms, and the IMF’s latest country report on August 26 commended Egypt for its efforts to regain macroeconomic stability, which are beginning to show favorable outcomes.
“The exchange rate unification and the associated monetary policy tightening have reduced speculation, attracted foreign inflows, and tempered price increases,” said Antoinette M. Sayeh, deputy managing director at the IMF, in the report.
As of August 28, Egypt’s long-term 2033 eurobonds were valued at 81.77 cents to the dollar, a rise from 62 cents in January, reflecting a significantly improved outlook, as per S&P data. The central bank reported that foreign reserves had hit a record high of $46.5 billion at July’s end.
Yet, despite the influx of capital, the long-term viability of Egypt’s economic recovery remains questionable. Critics argue that the new influx of funds is merely a short-term solution that will evaporate unless Egypt’s private sector expands and the country reduces its reliance on foreign debt. The currency is still weak at E£48 to the dollar, and inflation, though reduced, remains high at 25.1% as of July.
The IMF
About The Author
