Special Issue: Egypt

“Egypt’s way out of the crisis is through additional economic adjustment and reforms to unlock its significant growth potential”

Main Points

  • Egypt was one of the fastest growing emerging markets prior to the double shock of the pandemic and the Russia-Ukraine conflict, yet lagging behind its peers in terms of convergence and competitiveness
  • External pressures in the aftermath of the double shock and the subsequent global monetary policy tightening eroded the buffers Egypt had built, forcing authorities to resort to the IMF
  • Slow economic adjustment and reform drive keeps uncertainty heightened, fueling market volatility
  • The near-term outlook for the EGP remains bleak, due to high external financing needs
  • Still, Egypt should avoid a full-blown balance of payments crisis
  • However, risks, are tilted to the downside, reflecting, inter alia, a fragile social environment and high public debt
  • Egypt has strong upside potential for growth

Special Issue: Egypt