Egypt's Economy Faces Thorny Path In The New Year

(MENAFN- Kuwait News Agency (KUNA)) CAIRO -- Elaborating, he predicted that the inflation in 2025 might record major fall particularly in its last quarter, in tandem with relative slash of the interest rates and limited drop of the pound value. Nevertheless, continuing inflow of the cash from abroad would remain a dominant factor.
Inflation, he added, could be slashed by 20 percent or less through a group of incentive measures for boosting the dollars' inflow and avert a recurrence of the greenback shortage in the domestic market.
He alluded in this context to the "Ras Al-Hekma' enterprise, launched in coordination with the UAE at a tentative value of USD 35 billion, along with associate investments estimated USD 140 billion.
Such a venture is helpful to enrich the treasury with more dollars and in turn maintain the pound stability, in addition to financing imports without pressures on the currency and the prices, Sami said.
Dr. Hassan Al-Sadi, a professor of economic financing at Cairo University, said identical projects is the ideal solution for securing the hard currencies that the Government needs to to meet its debts liabilities amounting to some USD 152 billion.
The Egyptian economy, with its current structure, cannot secure the hard currencies to pay the debts, thus making balance between the needs and liabilities is not possible except with borrowing however such an option will hike the debts' ceiling.
Dr. Al-Sadi has added that the deficit in the balance of trade that reached USD 30 billion cannot be covered with the remittances from the Egyptians abroad, the Suez Canal proceeds, the industrial and agricultural exports and the tourism returns, alone, suggesting that the ideal solution is selling assets and making mega deals such as "Ras Al-Hekma" venture.
Some of the major challenges facing the economy this year is paying the liabilities ranging between USD 27-28 billion, he said, noting that Cairo paid some USD 30 billion in 2024.
Egypt hopes that the financial bailout, approved by the International Monetary Fund in March, and the EU USD eight billion aid would help in securing the required amounts of the hard currencies, fund the development enterprises and ease off the burden on the State budget.
The external aid is linked to terms such as the Government implementation of the reform plans such as amending the irregularities in the budget and the monetary policies, selling assets of some of the government companies.
Ten companies are expected to be floated for the private sector and the foreign investors in 2025.
The domestic product recorded 3.5 percent in the first quarter of the current financial year, compared to 2.7 percent in the corresponding period of the past fiscal year, as declared by the Minister of Planning and Economic Development Dr. Rania Al-Mshat.
Therefore, the shortage of the foreign currencies may not be the major stumbling block in the new year but creating a lucrative investment environment to draw external capitals, pay the debts and boost the economy. (end)
mm

MENAFN07012025000071011013ID1109063652