Here's what you need to know about Egypt’s economic recovery in 2024

CAIRO – 29 December 2024: The year 2024 marked a pivotal chapter in Egypt’s economic journey, defined by significant challenges and transformative reforms. Faced with acute currency shortages, volatile exchange rates, and deep structural issues, the country embarked on bold measures to stabilize its economy, attract foreign investments, and pave the way for sustainable growth.

 

At the heart of the crisis was the Egyptian pound, which plummeted to a record low of 70 to the USD on the parallel market, far from the official rate of LE 30.95.

 

This disparity led to severe foreign exchange shortages, disrupted trade, and eroded investor confidence. By early 2024, talks of an expanded IMF package gained momentum as the government sought solutions to these mounting pressures.

 

A breakthrough came in February with a $35 billion agreement between Egypt and Abu Dhabi’s ADQ, granting development rights to Ras El Hekma.

 

This deal injected critical foreign reserves into the economy and laid the groundwork for structural reforms. March proved to be a turning point as the Central Bank of Egypt floated the Egyptian pound and implemented a 600-bps interest rate hike.

 

The LE briefly depreciated to 51 to the USD before stabilizing at 50.92. Simultaneously, the government unveiled a comprehensive $8 billion IMF package, outlining reforms focused on tax revenue growth, privatization, business environment enhancement, and reducing the state’s economic role.

 

Support from international partners was crucial. The EU pledged EUR 7.4 billion in loans, grants, and investments through 2027, while the World Bank committed $6 billion over three years to bolster reforms and private sector growth. By mid-year, $700 million had already been allocated for development initiatives.

 

The currency float revitalized foreign currency inflows, with remittances from Egyptians abroad surging back into formal banking channels.

 

By November 2024, Egypt’s foreign reserves rose to $47 billion, up from $35.3 billion in February. Remittances increased by 45.3% year-on-year, reaching $23.7 billion in the first ten months of the year. This renewed liquidity enabled the government to settle overdue arrears and restore financial stability.

 

Through decisive policy actions, strategic partnerships, and international support, 2024 became a year of recovery, resilience, and progress for Egypt’s economic landscape.