Egypt's economy is showing signs of recovery, with forecasts indicating lower inflation and growth, yet experts warn that significant policy changes are essential for sustainable progress. President Abdel Fattah El Sisi's economic strategies have come under scrutiny, particularly from economist Ziad Bahaa Eldin, who points to state intervention and reliance on foreign borrowing as critical obstacles to effective reform. Amid a currency crisis and soaring inflation rates nearing 40%, Egypt secured a substantial $60 billion bailout, which includes an $8 billion loan from the International Monetary Fund (IMF) to stabilize its economy.
Prime Minister Mostafa Madbouly has projected a growth rate of 4% for the fiscal year 2024-2025, alongside expectations that inflation will decrease to between 16% and 17%. While these indicators are promising, many Egyptians continue to grapple with the rising cost of living, underscoring the need for robust economic reforms. IMF chief Kristalina Georgieva has reiterated the importance of these reforms to ensure that the benefits of recovery reach the most vulnerable populations.
In parallel, the IMF is currently conducting a survey to evaluate the impact of the $8 billion reform program on low-income citizens, with Georgieva set to visit Cairo in early November 2024 to discuss the findings. The recent devaluation of the Egyptian pound by 40% in March 2024 has heightened the urgency for effective currency reform. As Egypt seeks to attract foreign investment by selling over two dozen state assets, the IMF's decision to lower borrowing costs is projected to save the country approximately $800 million by 2030, providing some fiscal relief amid ongoing economic pressures. Furthermore, remittances from expatriates have surged to $2.6 billion in August 2024, contributing positively to the national economy. Despite these developments, the national debt is still projected to remain above 85% of GDP this fiscal year, indicating that significant challenges lie ahead for Egypt's economic landscape.