RIYADH: Egypt has achieved real growth of 3.9 percent in the first half of the current fiscal year, signaling positive resilience of the economy, Prime Minister Mostafa Madbouly revealed.
In media statements following a meeting with the Deputy Managing Director of the International Monetary Fund Nigel Clarke, Madbouly noted that private sector investment rose by 80 percent, while foreign direct investment increased by approximately 17 percent during the period from July to December.
He also clarified that Egypt’s fiscal year runs from July 1 to June 30 of the following year.
The figures align with global credit rating agency Moody’s decision in February to affirm the North African country’s Caa1 long-term foreign and local currency ratings with a positive outlook, citing improved debt service prospects, stronger foreign exchange reserves and lower borrowing costs following the Egyptian pound’s devaluation and flotation.
Egypt’s Prime Minister Mostafa Madbouly said the country is witnessing a downward trend in debt. Egyptian Cabinet/Facebook
According to the newly released statement, Madbouly said: “The Egyptian economy has proven its resilience and ability to absorb the very significant external shocks that Egypt, like other countries around the world, has been exposed to in the recent period.”
He added: “This was confirmed by the IMF’s certification that Egypt is proceeding at a steady pace on the path of economic reform.”
The prime minister further noted that non-oil exports also witnessed a growth of approximately 33 percent during the first nine months of the year.
He highlighted that these indicators have supported strong growth in key productive sectors, such as industry, communications and information technology, tourism, and others, helping to boost investor confidence in the Egyptian economy.
“Furthermore, we have witnessed a decline in unemployment rates to less than 7 percent, which is the lowest rate witnessed in Egypt today throughout history,” Madbouly said.
Deputy Managing Director of the International Monetary Fund Nigel Clarke said Egypt has made tangible and clear progress regarding its macroeconomic reform program. Egyptian Cabinet/Facebook
He also explained that inflation rates and indicators in Egypt have declined significantly, noting that last month saw inflation rates fall to 13.9 percent, compared to more than 37 percent during the same period last year.
According to the Prime Minister, the country is also witnessing a downward trend in debt. Madbouly pointed out that the general budget deficit has also decreased over the past 10 months to 6.5 percent, compared to 6.7 percent.
He noted that the Egyptian state aims to reduce debt to approximately 85 percent of gross domestic product by the end of June, compared to 96 percent in June 2023.
The prime minister went on to affirm the state’s commitment to continuing its path of economic reform and exerting maximum efforts, thanking the IMF and its task force.
Madbouly highlighted the successful completion of four previous reviews under the current program and noted that the fifth review is now underway, in coordination with the fund’s task force.
Governor of the Central Bank of Egypt Hassan Abdalla, Prime Minister Mostafa Madbouly, and Deputy Managing Director of the International Monetary Fund Nigel Clarke. Egyptian Cabinet/Facebook
The IMF’s Clarke emphasized that Egypt has made tangible and clear progress regarding its macroeconomic reform program.
“This is an Egyptian program that has resulted in a strong decline in inflation and unemployment rates, while foreign exchange reserves have increased, along with the availability and abundance of foreign currencies. This is no longer a problem as it was before,” he said, adding: “We have also witnessed a steady increase in GDP growth rates, as the Egyptian economy continues on its path toward stability.”
The deputy managing director of the IMF went on to say that these significant positive results achieved by the Egyptian economic reform program were due to the bold decisions and actions of the government.
He noted that these reforms include the transition to a flexible exchange rate system, the adoption of a monetary policy based on economic stability, and the intensive efforts being made to mobilize domestic revenues to ensure a sustainable and stable fiscal policy.
In the same context, Clarke shed light on how the progress in Egypt’s economic reform program also includes the social dimension and provides support to the neediest groups.
Egypt’s Prime Minister Madbouly said private sector investment rose by 80 percent, while foreign direct investment increased by approximately 17 percent during the period from July to December. Egyptian Cabinet/Facebook
“I welcome these reforms that have led to these positive results,” he said, calling for continued implementation of the economic reform program.
The official also addressed the increase in the percentage of financing provided to the private sector and the growth in the private sector’s share of GDP, stressing that all of this was a direct response to the improvement and stability witnessed in the macroeconomic environment.
Clarke further justified that a rapid transition to a more sustainable economic standard requires a model in which the private sector leads growth and economic activity.
“This is already the current path, and we are moving forward together to accelerate it, reducing the state’s role in economic activity, making room for the private sector, and promoting equal opportunities for various economic sectors,” he said.
The IMF’s deputy managing director added: “This will enhance economic dynamism and attract both local and international investment. It will also lead to further progress and prosperity for the Egyptian economy, and, most importantly, it will lead to a more sustainable economic model.”
Deputy Managing Director of the International Monetary Fund Nigel Clarke expressed his optimism that the Egyptian economy would achieve positive results in the future. Egyptian Cabinet/Facebook
During his speech, Clarke also addressed the economic shocks that have become a defining feature of today’s global landscape, emphasizing that the region’s most critical issue is its economic resilience in the face of these disruptions.
Toward the end of his talk, the deputy managing director expressed the IMF’s appreciation for the long-standing partnership with Egypt, a key member of the fund. He stressed that the IMF continues to support Egypt in completing the implementation of bold economic reforms, which will contribute to achieving positive outcomes for the country and its people.
The Central Bank of Egypt expects the annual inflation rate to slow down during 2025 and 2026 compared to the sharp decline witnessed in the first quarter of this year, according to the bank’s monetary policy report.
The newly released report reveals that the Central Bank of Egypt expects an inflation rate of 14 percent to 15 percent on average in 2025 and 10 percent to 12.5 percent in 2026. The bank has attributed the slowdown in the annual rate of inflation decline in 2025 and 2026 to the relatively slow decline in non-food inflation.
The entity also expects inflation to stabilize around its current levels until the first half of 2026 before resuming its downward path, the report noted.
