Moody's sees 5% growth for Egypt's economy next fiscal year

CAIRO - 21 November 2024: Credit ratings agency Moody's has expressed confidence in Egypt's economic future, forecasting a 5% growth rate for the upcoming fiscal year, building on an estimated 4% growth in the current year. The agency anticipates a significant decline in inflation, from approximately 27.5% this year to around 16% next year.

 

Moody's attributes this positive outlook to a stabilizing global economic environment, characterized by moderating inflation rates and subsequent interest rate reductions. This projected growth and decline in inflation could have a positive impact on various sectors, including manufacturing, tourism, and trade.

 

While the International Monetary Fund (IMF) mission led by Ivanna Vladkova Hollar recently concluded its discussions with Egyptian authorities, progress on the fourth review of the Extended Fund Facility (EFF) has been impacted by regional geopolitical tensions, particularly the war on Gaza and trade disruptions in the Red Sea. These factors have negatively affected economic sentiment and reduced Suez Canal revenues by up to 70%. Additionally, the influx of refugees has placed a strain on public services.

 

Despite these challenges, Egypt has implemented crucial reforms to stabilize its economy. The unification of the exchange rate has alleviated FX backlogs and eased import restrictions, while monetary tightening measures have helped contain inflationary pressures.