CAIRO: Egypt's economic situation is "worrisome" and it needs quick measures to restore economic activity, the planning minister told the state news agency MENA as Egypt holds talks with the IMF on a $4.8 billion loan.
After two years of political turmoil, Egypt is struggling with an economic crisis and a high budget deficit. Foreign currency reserves are critically low, limiting its ability to import wheat and fuel.
An International Monetary Fund (IMF) delegation resumed long delayed talks with the government on Wednesday on a loan, which would throw Egypt a financial lifeline and potentially unlock a much larger amount in foreign aid and investment.
"The economic situation has become worrisome and quick measures are needed to restore (economic) activity," Planning Minister Ashraf al-Araby said, according to MENA.
Araby described the IMF talks as "positive" and said he hoped Egypt would reach a deal in principle with the global lender within two weeks, MENA said. The IMF has made no comment on the negotiations and set no deadline for their conclusion.
Cairo reached a provisional agreement with the IMF last November but President Mohamed Mursi halted implementation of the economic conditions the following month amid political violence over the extent of his powers, suspending an unpopular increase and widening of the sales tax on goods and services.
Economic conditions have worsened significantly since November, widening the fiscal gap that needs to be plugged, while the Egyptian pound has depreciated.
Foreign reserves dipped further to $13.4 billion at end-March, the central bank said on Thursday, down from $13.5 billion a month earlier, equivalent to less than three months' imports.
Egypt must convince the IMF it is serious about reforms aimed at boosting growth and curbing an unaffordable budget deficit. That implies tax hikes and politically risky cuts in state subsidies for fuel and food, including bread.
Just before the visit, the government announced an increase in the price of subsidized cooking gas. But it has postponed plans to ration subsidized fuel using smart cards until July 1, and some reports say that date may be pushed back further.
Prime Minister Hisham Kandil said on television on Friday night that Egypt needed to rationalize its energy consumption as a "national duty", with or without an IMF loan.
He defended the decision last week to raise the price of gas canisters to 8 Egyptian pounds ($1.17) from 5, saying there was no real increase since households were used to buying gas on the open market at between 20 and 40 pounds a bottle.
In remarks seen as preparing the population for sacrifices to fulfil the IMF's conditions, Kandil said the country was facing a great challenge and ordinary citizens were suffering the greatest burden.
The Egyptian pound EGY= has lost nearly one-10th of its value against the dollar on the official market this year and has fallen more sharply on the black market in the last few days due to dwindling supplies of the US currency.
Egypt economic situation 'worrisome', needs fast action, says minister
Egypt economic situation 'worrisome', needs fast action, says minister
S&P affirms UAE sovereign credit ratings at AA/A-1+ amid regional tensions
JEDDAH: The UAE’s sovereign credit ratings have been affirmed at AA/A-1+ with a stable outlook, as S&P Global Ratings highlighted the country’s strong fiscal buffers, diversified economy, and policy flexibility in the face of escalating regional conflict.
The agency cited the UAE’s consolidated net assets, estimated at 184 percent of gross domestic product in 2026, and its low general government debt of around 27 percent of GDP, as key buffers against economic shocks.
Sovereign credit ratings play a key role in determining a country’s borrowing costs and investor demand for its debt. A high rating signals strong fiscal health and policy stability, helping governments attract foreign investment and access global capital markets at favorable terms.
S&P noted that “our baseline forecasts carry a significant amount of uncertainty” amid heightened tensions involving Iran, Israel, and the US, including potential threats to key infrastructure.
The report added: “We also believe the authorities will deploy their substantial policy flexibility to counteract the effects of volatility stemming from geopolitical tensions in the Gulf region on economic growth, government revenue, and its external accounts.
“We believe this flexibility will enable the UAE to withstand periods of low oil prices and, more importantly, the temporary disruption of oil production and export routes.”
The UAE is facing a tense geopolitical environment amid escalating Iran-Israel-US conflicts. Threats around the Strait of Hormuz have nearly stopped vessel traffic, fueling oil market volatility and investor concern.
The ratings agency also emphasized the UAE’s diversified economic base, with non-oil sectors accounting for roughly 75 percent of GDP, as a stabilizing factor.
Strategic infrastructure, including the Abu Dhabi Crude Oil Pipeline to Fujairah, enables the country to bypass the Strait of Hormuz and safeguard oil exports, while ADNOC’s overseas storage investments further mitigate risk.
Despite the risks, S&P expects sectors such as financial services, trade, and tourism to remain resilient. It forecasts that UAE growth will moderate to 2.2 percent in 2026, down from 5 percent in 2025, reflecting potential impacts from expatriate outflows, reduced tourism revenue, and lower real estate demand.
S&P cautioned, however, that “we now expect weaker economic and external performance due to increased intensity, scope, and potential duration of conflict in the Middle East,” underscoring that prolonged disruption could weigh on fiscal and external accounts.
The affirmation underscores investor confidence in the UAE’s ability to navigate short-term geopolitical challenges while maintaining long-term stability. Analysts said the country’s large liquid asset buffer and effective policy tools will likely contain the credit impact of regional tensions and support continued economic growth.
The UAE has consistently maintained strong and stable sovereign credit ratings, reflecting a resilient and diversified economy, as well as prudent fiscal management.
Despite occasional caution during regional tensions or oil market swings, ratings have remained high, underscoring the country’s policy flexibility, fiscal strength, and appeal to global investors.
