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Egypt - Coggle Diagram
Egypt
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Problems
Internal
Borrowing spree, under President Abdel Fattah al-Sisi
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Government has turned to domestic lenders, which, with the surge in interest rates, has increased its deficit
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failed industrial development due to poor planning and heavy bureaucracy, and export policies that created a persistent trade deficit
External
War in Gaza Strip
Tourism
Egypt’s tourism revenues are set to experience a 10-30 percent fall from last year, which could cost the country 4-11 percent of its foreign exchange reserves and shrink GDP
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Gas sector
Egypt is home to the Eastern Mediterranean’s only two gas liquefaction facilities. Israel exports its gas – including from Tamar – to Egypt, where it is turned into LNG and exported to other markets, in particular, Europe.
Egypt’s re-exports of gas fell by more than 50 percent in the fourth quarter of 2023 compared with that same period in 2022
Influx of refugees
The fate of the 1.4 million Palestinians taking shelter in Rafah is also a source of unease in Egypt.
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President SISI
Sisi often blames Egypt's economic struggles on turmoil following a 2011 popular uprising, as well as annual population growth that the World Bank put at 1.7% in 2021. Authorities have also pointed to external shocks, including the COVID-19 pandemic and war in Ukraine.text
IMF agreement
Under the latest IMF agreement, authorities are committing to exchange rate flexibility, as well as fiscal discipline in order to bring down inflation and the trade deficit.
The policy plan that led to the deal also includes structural reforms to encourage private-sector growth, partly by removing exemptions and privileges for the country's powerful state-owned enterprises.
It also provides for "a new framework to slow down infrastructure spending including projects that have so far operated outside regular budget oversight", the IMF said