Main Points
- Egypt was one of the fastest growing emerging markets prior to the double shock of the pandemic and the Russia-Ukraine conflict, yet lagging behind its peers in terms of convergence and competitiveness
- External pressures in the aftermath of the double shock and the subsequent global monetary policy tightening eroded the buffers Egypt had built, forcing authorities to resort to the IMF
- Slow economic adjustment and reform drive keeps uncertainty heightened, fueling market volatility
- The near-term outlook for the EGP remains bleak, due to high external financing needs
- Still, Egypt should avoid a full-blown balance of payments crisis
- However, risks, are tilted to the downside, reflecting, inter alia, a fragile social environment and high public debt
- Egypt has strong upside potential for growth
Special Issue: Egypt