Dr. Hala Elsaid, Egypt’s Minister of Planning and Economic Development, has predicted that the country’s economy will grow by 2.9 percent or 3 percent in the financial year ending June 2024, before accelerating to 4.2 percent in the 2024/25 fiscal year.
According to a statement released by the Egyptian Ministry of Planning, Dr. Elsaid attributed this growth to increased investment spending, stronger net exports, and higher consumer spending.
In separate comments made during talks with the International Monetary Fund (IMF) in Washington, Finance Minister Mohamed Maait forecast 2.8 percent economic growth for Egypt in the current fiscal year, followed by 4.2 percent growth in 2024/25.
Read more: Egypt’s SCZONE secures $3.23 billion in new contracts over 10-month period
Alleviating foreign currency shortage
Egypt’s economy had previously been weighed down by a severe shortage of foreign currency. However, this situation has been alleviated by a $24 billion real estate deal with the United Arab Emirates (UAE) in late February, as well as a significant devaluation of the Egyptian pound and the signing of an $8 billion agreement with the IMF in early March.
Subdued economic growth in Q4 2023 and Q1 2024
Despite these positive developments, the Central Bank of Egypt (CBE) reported that economic growth slowed to 2.3 percent in the fourth quarter of 2023, down from 4.2 percent a year earlier. The bank’s indicators suggest growth will remain subdued in the January-March 2024 period.
Improvement in net foreign assets and trade balance
In April 2024, Egypt’s net foreign assets deficit contracted by $586 million to $3.68 billion, following the disbursement of an $820 million loan instalment from the IMF earlier in the month. Additionally, the country’s trade balance deficit decreased by 23.2 percent year-over-year to $2.37 billion in March 2024, down from $3.09 billion in the same month of the previous year.
Unchanged key interest rates
Lastly, in May 2024, the CBE announced that it will keep its current key interest rates unchanged following its latest Monetary Policy Committee meeting, which was the final meeting of the 2023/2024 fiscal year. The bank’s overnight deposit rate, overnight lending rate, main operation rate, and discount rate will remain at 27.25 percent, 28.25 percent, 27.75 percent, and 27.75 percent, respectively.
For more economy news, click here.
