Egypt International Reserves (USD bn)

International Reserves in Egypt

The economy ended H1 FY 2023 (July–December 2022) on a softer footing, and momentum should have waned further at the start of H2 as challenges mounted. In Q3 FY 2023, headline and core inflation averaged over 30% and nearly 40%, respectively—fueled in no small part by the Egyptian pound having weakened over 20% so far this calendar year. The ailing currency, compounded by higher interest rates as the Central Bank responded aggressively to inflation, pressured purchasing power further, boding ill for spending. Additionally, non-oil private-sector PMI data revealed conditions deteriorated at a steeper pace compared to Q2. In other news, in late March, the World Bank approved a USD 7 billion loan for FY 2023–2027; the funds will support improvements in education and health services, boost private sector jobs and help adapt to climate change.