Abdel-Fattah El-Sisi, Egypt's president, speaks during a high-level segment on day two of the COP28 climate conference at Expo City in Dubai, United Arab Emirates, on Friday, Dec. 1, 2023. More than 70,000 politicians, diplomats, campaigners, financiers and business leaders will fly to Dubai to talk about arresting the world’s slide toward environmental catastrophe. Photographer: Hollie Adams/Bloomberg
Cairo: Egypt’s president suggested its International Monetary Fund (IMF) programme might need to be reviewed if economic pressures place an intolerable burden on the country’s more than 106 million people.
The US$8bil IMF deal reached earlier this year is being implemented under “extremely difficult regional, international and global circumstances”, President Abdel-Fattah El-Sisi said in comments to a conference in Cairo.
“We have agreed with the IMF, and this is an important matter,” El-Sisi said.
“I say to the government and to myself that if this challenge” leads to pressures on the public they cannot bear, “the situation must be reviewed and the situation with the fund must be reviewed”.
El-Sisi’s remarks signal the travails the Middle East’s most populous nation may still be facing even after a vast global bailout promised a route out of a gruelling two-year economic crisis that had been exacerbated by the Israel-Hamas war.
A US$35bil investment deal with the United Arab Emirates allowed Egypt in March to enact a long-awaited devaluation of its pound, securing an expanded IMF pact and other international assistance.
Part of the IMF deal involves trimming spending, and the government in recent months has raised prices of subsidised goods and services including electricity and bread.
It increased fuel prices last Friday for the third time in 2024.
Such hikes have caused Egyptian inflation – which had been slowing from a record last year – to slightly quicken for a second month to 26.4% in September.
The Egyptian leader’s comments reflect the difficult balance the government has to strike in complying with pledges for fiscal discipline while avoiding upsetting an Egyptian population grappling with price increases that have far outstripped most growth in salaries.
El-Sisi also talked of current tensions that are impacting economies around the world, without going into details, and referred to fears among some of recession in the coming years.
Egypt has already lost “US$6bil or US$7bil” in the past seven to 10 months, he said.
The North African nation has seen shipping traffic through its Suez Canal – an important source of foreign currency – dwindle since Houthi fighters in Yemen started targeting shipping in the Red Sea in solidarity with Hamas.
Sisi said Egypt is “undertaking this reform programme in very difficult regional and global circumstances” which “must be taken into account”. — Bloomberg
