Thursday July 18th, 2024
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PM Madbouly: “Egyptian Economy Will Recover in 2025”

The prime minister addressed the significant increase in subsidies for diesel, bread, supplies, gas, cylinders and electricity.

Cairo Scene

PM Madbouly: “Egyptian Economy Will Recover in 2025”

During a press conference, Prime Minister Mostafa Madbouly expressed confidence that the Egyptian economy is on track for a full recovery by 2025. In his address, Madbouly outlined the government's plans to tackle key economic challenges, including reducing inflation to below 10 percent by 2025.

The prime minister addressed the significant increase in subsidies for diesel, bread, supplies, liquefied natural gas (LNG) cylinders and electricity, which reached EGP 342 billion in 2023, compared to less than EGP 100 billion in 2021. Moreover, the cost of borrowing rose to 25 percent, up from 10 percent prior to 2022.

While Egypt experienced a surge in headline inflation rates in the first nine months of 2023, reaching a peak of 40.3 percent in September, the trend began to slow down in October. According to the Central Agency for Public Mobilization and Statistics (CAPMAS), the annual headline inflation rate declined to 36.4 percent in November 2023.

To address financial gaps, Egypt is actively seeking additional funding to close a USD 17 billion financing gap by 2026, with projections of USD 6 to USD 8 billion for the current fiscal year. Additionally, the country aims to procure more hard currency to meet its obligations to the International Monetary Fund (IMF). Egypt is currently engaged in a four-year USD 3 billion loan program with the IMF, which necessitates implementing economic reforms, including the adoption of a flexible exchange rate.

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