The Economic Pulse

In 2023, Egypt confronted formidable economic challenges exacerbated by the repercussions of the Ukrainian war, leading to a substantial capital flight exceeding US$20 billion in portfolio investments. In the wake of this event resulted in a prolonged deficit in the capital account, posing a serious threat to the Egyptian economy amid increasing external debt obligations.

To address this economic instability, the Egyptian government entered negotiations with the International Monetary Fund (IMF), culminating in a new US$5 billion financing agreement under the Extended Fund Facility. In return, the government committed to implementing a series of economic reforms, including the adoption of a flexible exchange rate system and reducing state intervention in the local economy.

Despite the acquisition expectations from (GCC) states for state-owned assets, the anticipated investments have not materialized. The central bank, however, is exploring debt management tools, with the United Arab Emirates extending a deposit of one billion US dollars due in July 2026, and Kuwait renewing a $2 billion deposit due in April 2024. Additionally, the government aims to secure foreign direct investments of $12 billion, including $5 billion from privatization, and seeking $3 billion through international bonds.