• Monday, June 24, 2024
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Help pours in for Egypt’s stuttering economy

Help pours in for Egypt’s stuttering economy

Help is pouring in for the beleaguered Egyptian economy with two rich Gulf countries offering a cash bail out in excess of seven billion dollars.

Qatar plans to invest $5 billion in Egypt in the coming period, Egypt said, in the latest sign of support from the energy-rich Gulf as the North African nation’s economy is buffeted by the war in Ukraine.

The Qatar has agreed with Egypt to form a committee to coordinate investment plans, Egypt’s cabinet said in a statement Tuesday following meetings between Egyptian and Qatari officials. No timetable was given for the investments.

The Qatari agreement comes after Abu Dhabi wealth fund ADQ earlier this month made a roughly $2 billion deal to buy Egyptian state-owned stakes in publicly listed companies.

It was one of the first tangible signs of fresh Gulf support for Egypt to help it ride out the crisis.

The most populous Arab nation is seeking support from the International Monetary Fund that could include a loan.

A major food importer, Egypt has been hit hard by record grain prices fueled by the conflict. One of the Middle East’s most indebted nations, it buys most of its wheat from Russia and Ukraine, while Russian visitors have previously made up a significant proportion of its tourism market.

Read also: Nigeria watches as Ghana, Egypt, US adjust petrol prices

A week ago, Celine Allard, mission chief for Egypt “the rapidly changing global environment and spillovers related to the war in Ukraine are posing important challenges for countries around the world, including Egypt.”

According to her, “set of macroeconomic and structural policy measures would mitigate the impact of this shock on the Egyptian economy, protect the vulnerable, and preserve Egypt’s resilience and medium-term growth prospects.

“To this end, the authorities’ recent actions to expand targeted social protection and implement exchange rate flexibility are welcome steps. Continued exchange rate flexibility will be essential to absorb external shocks and safeguard financial buffers during this uncertain time. Prudent fiscal and monetary policies will also be needed to preserve macroeconomic stability.”

Egypt has lowered its economic growth forecast for the current fiscal year 2021-2022 to 5.7 percent, from a previous forecast of 6.4 percent as a result of the repercussions of the Russian-Ukrainian crisis, according to the Planning Minister Hala El-Said.