Egypt Industrial Production (ann. var. %)

Industrial Production in Egypt

After decelerating in the prior quarter, annual GDP growth was likely moderate in Q3 FY 2023 (January–March 2023). Both headline and core inflation accelerated to multi-year highs in the quarter as the Egyptian pound weakened nearly 20% against the USD, which will have hurt purchasing power. A more aggressive monetary policy stance likely further pressured activity. However, surging tourist arrivals will have provided support. In Q4, the outlook is improving: In April, inflation eased slightly and the non-oil PMI rose to a six-month high. In other news, in early May, Fitch Ratings downgraded Egypt’s rating to ‘B’ with a negative outlook and Moody’s placed the ‘B3’ rating under review for a downgrade. The rating agencies cited increasing risks to the country’s ability to meet financing needs amid constrained financing conditions.