“The large devaluation of the currency and increase in interest rates will likely help Egypt maintain an upsized IMF program, reduce the risk of a renewed build-up of external imbalances, and strengthen the economy's shock resilience"
The positive outlook “reflects significant official and bilateral support announced and marked policy steps taken in the past week that will, if maintained, support macroeconomic rebalancing,” the note said
Continued foreign currency shortages, difficult operating conditions, and high asset risks were main contributors to the new outlook, noting that it may impact banks’ operations and place further pressure on various aspects of operations
The World Bank also expects Egypt’s GDP growth to rise to 3.9% in Fiscal Year 2024/2025.
Fitch Ratings has lowered credit ratings on four Egyptian banks, citing concerns about external financing, macroeconomic stability, and government debt
