Egyptian President Warns of Regional 'Challenges' to Country's Economy

Photo: Brendan Smialowski Agence France-Presse Egyptian President Abdel Fattah al-Sisi in Washington in December 2022

Agence France-Presse in Cairo

Posted at 3:50 p.m.

• Africa

Egyptian President Abdel Fattah al-Sisi warned on Sunday that if regional “challenges” created “unbearable” economic pressure on the country’s population, reforms underway under an International Monetary Fund (IMF) loan should be “reviewed.”

Egypt, the most populous Arab country, is crushed by its external debt — nearly $165 billion — and is currently going through the worst economic crisis in its history with a growing need for financial aid amid soaring inflation.

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Its economy has been hit by a series of shocks related to the context of the war in Gaza, such as attacks by Yemeni Houthi rebels on commercial ships they believe to be linked to Israel in the Red Sea and the Gulf of Aden, which have depressed revenues from the Suez Canal.

“If these challenges lead us to exert unbearable pressure on public opinion, the situation must be reviewed with the IMF,” Sisi said at a World Congress in Cairo on Population, Health and Human Development.

The IMF granted Egypt an additional $5 billion in loans in March, following a $3 billion loan at the end of 2022.

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In return, the Fund demanded far-reaching reforms, including a more flexible exchange rate, plans to strengthen the role of the private sector in the economy, and tackling high inflation and public debt.

Egypt is “undertaking this [reform] program in very difficult regional and global circumstances” that “must be taken into account,” Sisi said Sunday.

“We have lost six to seven billion dollars in the last seven, eight, 10 months,” he added, referring to the Houthi attacks.

The Egyptian president’s remarks come two days after authorities announced new fuel price hikes of up to 17%, the third increase this year.

During successive devaluations since 2022, the Egyptian pound has lost two-thirds of its value.

Cairo has already received three tranches of loans from the IMF, which said in early October that its next review mission for the next payment, originally scheduled for September, “is expected to take place in the coming months.”