At this critical time for the global economy, Egypt is facing major challenges following the Suez Canal crisis that impacted its services sector and slowed down its economic growth. However, positive signs are beginning to emerge, suggesting a possible economic recovery in the near future, according to the Central Bank of Egypt forecasts.
In a recent statement, the Central Bank’s Monetary Policy Committee highlighted its choice to maintain overnight deposit and lending rates. Indeed, the figures reveal that real gross domestic product growth slowed to 2.2% in the first quarter of 2024, compared to 2.3% in the fourth quarter of 2023, due in particular to the crisis observed in the Suez Canal.
The deceleration of economic activity in the public sector, directly impacted by the crisis, has strongly influenced this trend. At the same time, the recovery in economic activity in the private sector has not been enough to compensate for this decrease. However, preliminary indicators for the second quarter of 2024 point to a recovery in real GDP growth, suggesting a gradual improvement from FY2024/25 onwards, following a sharp deceleration in the previous fiscal year.
Although real economic activity remains below potential, supporting the downward trend in inflation going forward, this situation is expected to persist until it approaches full capacity in the medium term.
This encouraging outlook provides a positive outlook for Egypt’s economic developments. However, it is essential to remain vigilant and implement appropriate economic policies and structural reforms to foster a sustainable economic recovery.
In conclusion, Egypt is at a critical juncture in its economic development and the measures taken in the coming months will have a significant impact on the health of its economy. It is essential to remain attentive to developments and work together to address current challenges and build a prosperous future for the country.