CAIRO – 17 March 2024: Goldman Sachs has revised its projections for Egypt's economic outlook, instead of an anticipated deficit of $13 billion, Egypt is now projected to experience a surplus of $26.5 billion in external financing over the next four years.
The bank also expected current deficit to expand to 2.5 percent gross domestic product (GDP) by the end of 2027.
This positive development is attributed to various factors, including the UAE's investment in Ras El Hekma, the flotation of the Egyptian pound, and a financing deal with the International Monetary Fund (IMF).
According to Goldman Sachs' research note, Egypt's trade deficit is expected to rise to $40.1 billion in 2024, compared to $31.4 billion in the previous year.
However, the bank predicts that Egypt's foreign exchange reserves will also see a significant increase, reaching $50 billion by the end of 2024 and surpassing $60 billion by the end of 2027. This growth in reserves is expected to partly compensate for the widening trade deficit.
Furthermore, Goldman Sachs states that Egyptians' remittances abroad will rise to just under $30 billion by the end of 2027, compensating for much of the widening trade deficit.
The bank also highlights the positive impact of the Ras El Hekma deal, which is expected to attract $24 billion in direct foreign investment flows, along with an additional $9 billion from other foreign investments in 2024.
Earlier in March, the IMF loan has been augmented and increased to $8 billion instead of $3 billion.
Prime Minister, Mostafa Madbouly, also explained in the press conference on March that Egypt will also receive $12 billion in soft loans from the World Bank and the European Union.
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