World Courant
Credit standing company Moody’s expects Egypt to face important strain on each debt and monetary liquidity in 2024.
In its report on the Center East and North Africa, the company added that it expects an additional depreciation of the official change charge of the Egyptian pound, as mirrored in costs on the parallel market.
“For causes such because the depreciation of the foreign money, we anticipate inflation to stay very excessive in Lebanon, whereas in Egypt it should attain double digits,” the report stated.
It added {that a} mixture of “the depreciation of the native foreign money, rising inflation and rates of interest will dampen consumption and funding in Egypt.”
Greater than 60 p.c of Egypt’s revenues may also go to curiosity funds within the fiscal yr ending June 2024, leaving the federal government with very restricted monetary flexibility to answer shocks – equivalent to these ensuing from the clashes between Israel and Hamas in Gaza.
In keeping with the report, Egypt is going through a financing hole attributable to massive international debt funds.
Egypt’s IMF program, which is going through delays because it falls wanting its targets, will partially cowl the nation’s financing wants, Moody’s famous, including that the federal government is counting on international direct funding to fill the hole.
The report states that the bottom case assumes that the navy battle between Israel and Hamas stays concentrated in Gaza, and factors out that on this case the credit score implications of the battle can be restricted to Egypt and Lebanon.
The company added that diverting ships away from the Suez Canal because of the Huthis’ “partial blockage” of Bab al-Mandab will scale back Suez Canal revenues, between 60 and 70 p.c of which go to the federal government.
Nonetheless, it stated the potential extra depreciation of the pound will soften the affect on the federal government funds because the canal’s revenues are in {dollars}.
Moody’s expects the affect of the Gaza battle on Egypt’s tourism sector to be long-lasting because of the sector’s geographical proximity, though its social and monetary affect is at the moment restricted.
Disaster at sea
The Crimson Sea disaster has forged a shadow on international commerce, with container ships crusing round Africa to keep away from the area.
Huthi militants in Yemen however vowed to proceed attacking ships certain for Israel America’s resolution to determine Operation Prosperity Guardiana global maritime activity drive, to guard the shipments.
This has resulted in a pointy discount in oil tanker actions via the Bab al-Mandab Strait within the Crimson Sea.
The Chairman and Chief Government Officer of the Suez Canal, Osama Rabie, introduced on Tuesday that the variety of ships transiting the Suez Canal has decreased by 30 p.c in comparison with the identical interval final yr, attributable to tensions within the Crimson Sea.
Throughout a phone interview with Lamis al-Hadidi on the Egyptian tv present ‘Final Phrase’ (Kalema Akhera), Rabie added that US greenback returns additionally fell by 40 p.c.
Devaluation of the pound
Capital Economics, an unbiased financial analysis firm primarily based in Britain, famous that Egypt’s cope with the Worldwide Financial Fund (IMF) for the following mortgage is looming – and with it a devaluation of the Egyptian pound.
In keeping with the report, inflation in Egypt is slowing however will stay above the central financial institution’s goal stage till mid-2025, in line with the Arab Information Company.
Capital Economics additionally famous that talks between Egyptian officers, the US Treasury Division and the IMF seem “optimistic.”
Egyptian Prime Minister Mostafa Madbouly stated in December that talks had been held with the Worldwide Financial Fund (IMF) haven’t stopped, stressing that the financial reform program is solely nationwide.
He continued at a press convention: “Disagreement and controversy could come up over the techniques used. Communication is ongoing and we’re working with the Fund to develop a timetable that can be introduced shortly.”
The Worldwide Financial Fund earlier in October lowered its development forecast for the Egyptian economic system in the course of the present 2023-2024 funds yr to three.6 p.c, from its earlier estimates of 4.1 p.c.
Tourism affected
The battle towards Gaza has been reasonable influenced the vacationer motion within the Crimson Seasuch because the occupancy charge of inns and vacationer villages Hurghada and Marsa Alam fell by 60-80 p.c in most inns.
Officers of international tourism firms in Hurghada confirmed that the present occasions have led to a drop within the share of recent reservations till February, along with a drop within the variety of reservations in the course of the Christmas and New Yr holidays.
One of many worldwide tourism firms, which manages about 65 inns in Egypt, revealed that fifty p.c of its reservations in Egypt have been canceled for the remainder of 2023 attributable to Israel’s battle on Gaza.
‘A tricky new yr for Egypt’ – Moody’s expects important financial strain
Africa Area Information ,Subsequent Massive Factor in Public Knowledg
